Ice-ice disease in cultivated seaweeds is often associated with environmental stress and infection by pathogenic marine bacteria. No studies have associated the disease with marine fungi. Our study aimed to isolate marine fungi from cultivated Kappaphycus species and assess their ability to induce the disease. Kappaphycus alvarezii and K. striatum were collected from Calatagan, Batangas, Philippines. Following washing with sterile artificial seawater and inoculation into culture media, 18 morphospecies of marine-derived fungi (MDF) were isolated. Fungal diversity (H s s2.4) in infected seaweeds was higher than in healthy specimens. K. striatum (orange variety) had the highest incidence of MDF with 67 isolates, while K. striatum (green variety) had the lowest incidence with only 17 isolates. The ability of MDF to produce carrageenolytic and cellulolytic enzymes and utilize algal components was also tested. Of the 18 MDF selected, three had carrageenolytic activity and ten had cellulolytic activity. Most isolates utilized carrageenan, agar, and cellulose. Among the 10 MDF assayed for their ability to induce ice-ice disease, three isolates (Aspergillus ochraceus, A. terreus and Phoma sp.) induced ice-ice disease symptoms (thallus bleaching) in healthy, non-axenic cultures of K. alvarezii.