Biosynthesis of fructo-oligosaccharides (FOS) was observed during growth of the thermophilic fungus Sporotrichum thermophile on media containing high sucrose concentrations. Submerged batch cultivation with the optimum initial sucrose concentration of 250 g/l allowed the production of 12.5 g FOS/l. The FOS mixture obtained was composed of three sugars, which were isolated by size-exclusion chromatography. They were characterized by acid hydrolysis and HPLC as 1-kestose, 6-kestose and neokestose. The mechanism of osmotic adaptation of S. thermophile was investigated and sugars and amino acids were found to be the predominant compatible solutes. The fungus accumulated glutamic acid, arginine, alanine, leucine and lysine, in order to balance the outer osmotic pressure. Fatty acid analysis of the membrane lipids showed a relatively high percentage of unsaturated lipids, which is known to be associated with high membrane fluidity.