Thanks everyone for the replies. I thought it was fungus but DH says it is more like nodules that are growing on the roots. The roots also put out a lot of suckers. I live on the Central CA Coast near Santa Cruz. We only get rain in the winter from Nov. to April. We have had one rain fall since last May and it dried up right away. No fertilizer, or sprinklers. We do water once a week with a soaker but it goes immediately into the ground. No standing water. We have very sandy soil that drains well. It is over a septic leach field. The tree has been in the ground for 23 years in the same location. It is a Stayman Winesap apple. It has only started doing this about 7 or so years ago but never this bad. We also get curly leaf and some white powery stuff on the leaves. I thought it was the same thing on the roots but it is totally different. Over the years we have sprayed with malathion, sulfer (dormant mix in winter), and copper oil dormat spray. Thanks for the help. Clare

Not a fungus. Instead, woolly apple aphids. To be certain that's correct, squish some of the woolly stuff. If it's the woolly apple aphid, you'll see a purple stain. If so, they're specific to apples. The bad news is that they are also on the reoots. Even so, my several apple trees with these aphids were still productive when I moved and the trees were about 15 to 20 years old.

You have quite the colorful garden growing on your apple tree! The bright green in the second picture and probably the dark green with little russet fruiting bodies in the first appear to be moss. The rest--pale green, dull light green, yellow-green, orange-gold, as well as the dusty white splotches, appear to be a variety of lichens. Lichens are associations of two or three distinct organisms (fungus, algae, and sometimes cyanobacteria) living in varying degrees of cooperation. They come in many sizes, shapes and colors. In general neither lichens nor mosses are thought to threaten the health of trees on which they live. I also live in northern California, at about 1500 feet in the Sierra foothills. Our area is sprinkled with black oak and several varieties of scrub and live oak. When cold weather comes and humidity rises, mosses and lichens suddenly become visible on all these trees. The more moisture we get, the more noticeable (and colorful!) the lichens become. Toward the end of a really wet season, the things are literally hanging off of the branches, like Spanish moss in the South. The one I marvel at most has long curly tendrils of bright glowing chartreuse. When the season changes again and things begin to dry, so do the lichens. Their seasonal extensions break, blow off, or dry up, and all but disappear--until the next rainy season. The oak trees never seem to mind. It's dark out right now, so I don't know whether or not we have lichens on our apple tree, but I wouldn't be surprised or worried if I saw them there. Scraping them off could very well injure a tree, allowing entry to a number of truly harmful organisms. The URL below may help allay your concerns. If you are still worried, you could call your local agricultural extension and make an inquiry. Sweetcicely Here is a link that might be useful: Lichen information

I got similar stuff on some of mine, [mostly to one side] caused by injury to bark/winter kill.Usually I leave it alone, tree can still go on for many years. You can scrap the dead bark off and latex spray if you want.