A preliminary physiological characterization of osmoregulation in an Aspergillus nidulans salt sensitive mutant carrying cotransformed DNA sequences from the marine hyphomycete Dendryphiella salina is described. A genomic DNA library made in lambda EMBL3 was cotransformed with the plasmid pDJB3 into an A. nidulans host carrying a selectable marker for transformation (pyrG89) and a salt sensitivity mutation (sltA1). In some cases D. salina clones appeared to directly complement the salt sensitivity mutation by restoring salt and arginine insensitivity. Other clones gave marked increases in salt tolerance and yet the hosts remained arginine sensitive. Improvements in salt tolerance correlated with an enhanced ability to induce polyol biosynthesis during salt challenge.