One of the commercial strains of Flammulina velutipes was analyzed for the presence of double-stranded RNA (dsRNA) elements to examine the underlying mechanism of strain degeneration. As a result, two dsRNA elements sized 1.9 and 1.8 kb were detected in mycelium derived from spontaneously brown-colored fruit body. They were not detected in the normal strains or in fruiting-impaired degenerative isolates. The dsRNAs were not in the nuclear or mitochondrial fractions, but were located in the cytoplasmic fraction. The presence of virus-like particles of ca. 50 nm diameter associated with the dsRNAs was confirmed by electron microscopic observation.