Fungi typically work unseen, like bacteria. We notice them only by their results. Terrestrial fungi and aquatic ones are colorless; except for a few kinds, their only colors are provided by their spores; the spores are what make bread molds colorful. The real body of fungi, their mycelia, are less noticeable, unless a damp spadeful of garden humus reveals their frayed gauzy cobwebs.
Also at home in water are yeasts, the unconnected, rounded, budding forms of fungi. Instead of forming a filamentous mycelium from hyphae like most of the fungi, the yeasts are constantly budding and pinching off, fragmenting and multiplying in small clusters of cells. The yeasts and mycelium-forming fungi of the biofilm have a page to themselves.
Modern thinking separates some of the organisms we think of as "funguses" from the true fungi: Saprolegnia, the "wood rotter" that may cause "mouth fungus" in a compromised fish, is one of the common Oocytes, or water molds, and the rarely seen myxomycetes or slime molds are no longer set among the fungi either.
Which are aquatic among the true fungi? A few familiar manifestations of the true fungi are not at home in water. For a start, there are no aquatic mushrooms or toadstools, because those large fruiting bodies depend on currents of air to scatter their spores. Also absent in water are the lichens, a kind of catch-all group invented to describe the symbiotic pairings of a fungus with an alga or a cyanobacterium. These partnerships were among the first conquerors of the land, the tougher cell walls of the fungus protecting the alga from drought. By contrast, there's no especial advantage for lichens in a water environment; instead, aquatic fungi are more likely to be closely associated with bacteria within the biofilm.
Another terrestrial role for fungi that's minimized in aquatic habitats is that of the mycorrhizae. Just about every terrestrial flowering plant, including each species of tree in the rain forest, has its own species of co-evolved mycorrhizal fungi, which coat its microscopic root hairs and penetrate the very cells of the root. The mycorrhizae bring water to the roots and share with the plant those essential nutrients that only fungal enzymes can "digest" out of the soil. The "higher" or vascular plants originally evolved on land. When some of them colonized freshwater they largely left behind their symbiotic fungi, but not all of them: mycorrhyzae are found especially among amphibious water plants with some aerial growth. How some mycorrhizae perform in the aquatic environment is the subject of Laura Marx's dissertation and website, "Vesicular arbuscular mycorrhizae in aquatic plants" (1999).
Fungal roles in water. Fungi rot the wood and leaf litter in tropical water. The fungi that have been most thoroughly studied are terrestrial, but their ecological role in freshwater is important: fungi are the main decomposers of softer plant and animal tissues. And they are the only organisms that can oxidize lignin directly and break it down: indeed the powerful carbon-to-carbon bonds of lignin that form the skeletal structure of wood can only be broken down by fungal enzymes. (Bacteria can break down the cellulose in plant walls, but not lignin.)
Water-saturated wood is a suitable substrate for fungal growth, only as long as there is enough oxygen in the water. Those enzymes need plentiful oxygen to create highly oxidative free radicals in order to crack the powerful chemical bonds of lignin and cellulose. By contrast, without oxygen— for instance at the bottom of an anaerobic bog— wood can lie for thousands of years without rotting. Closer to home, the enzyme cellulase, derived from fungi, produces your "stone-washed" jeans by dissolving away the outermost layers of cellulose-rich cotton fibers, thus releasing some dye.
Basidiomycetes and ascomycetes. Two of the main divisions in the kingdom of fungi are the basidiomycota and the ascomycota. The fungal diversity on submerged wood in the tropics is high, and, curiously, it doesn't overlap with the fungi on submerged wood in temperate waters.
Comparatively few basidiomycetes are found on submerged wood, according to a recent Thailand study. In Lake Barrine, northern Queensland, researchers found 39 fungi on suberged wood: only one was a basidiomycete. Though the particular assemblage of fungi was different at each site, most of the fungi in leaf litter that has been washed into tropical streams turn out to be ascomycetes, normal terrestrial mitosporic fungi, the same Thai study found. These are the fungi that break down leaf litter on the forest floor. "Mitosporic" simply means that these fungi normally reproduce vegetatively, dividing and elongating and forming asexual spores, rather than sexually, by exchanging genetic material within the nucleus.
In contrast to the basidiomycetes, a wide assemblage of the other major group of fungi, the ascomycetes, are more or less adapted to life in the water. All they need is some vascular plant material, alive or dead, either growing in the water, or emerse like the stems of reeds and rushes, or else to be washed in from the surrounding terrain on woody debris or even in leaf litter.
The planted aquarium is a haven for them. The filaments of the ascomycetes invade submerged plant stems, woody substrates and senescent leaves. They secrete enzymes to break down the cellulose of cell walls, break down the pectins that hold cells together and assimilate stored sugars and starches. These decomposers serve as food for the primary grazers in the biofilm.
Without passing through their sexual state, the freshwater ascomycetes constantly produce, at the ends of some hyphae, filamentlike or hollow spores ("conidia") that float or entangle or stick to new substrates. Eventually, if conditions are good, the ascomycetes may also form sexual fruiting bodies, in the form of a disc or a sac or cup that is more or less closed, according to the species, usually less than half a millimeter across. Then they can release their spores, which are dispersed in the water currents to fetch up on new substrates. Many of the microscopic spores of these aquatic ascomycetes are provided with filaments and gelatinous coverings to help them get entangled and stick fast in suitable places. The structures of these details are extremely various. So both the sexually produced spores and the conidia are distributed all through the freshwater planted aquarium. They provide mysterious subjects in floc to puzzle amateur microscopists.
Link. At the website maintained by Carol Shearer and Huzefa Raja, "Freshwater Ascomycetes and their anamorphs" (anamorphs are the non-sexual fungal life stages), you can see micropix of ascomycetes species and get some background information about the group of ascomycetes to be found in freshwater.