As long as you're doing a major remodel, I'd consult with your contractor to make sure you don't also have dry rot in your house and to fix those issues as they are found. Are you removing the siding, too? If so, some sort of moisture-proofing layer like Tyvek might be necessary to keep the house dry inside. But for any wet areas like bathrooms, laundry rooms, etc. I would make sure the contractor is re-framing where necessary and waterproofing like crazy in shower areas.

This article supports your idea that the mold is indeed carried by the water.

https://www.lvecowater.com/water-purification/signs-mold-water/

Do you have town water or are you on a well?

You might consider using large-format tile or solid surface on your shower walls, to minimize the grout lines, since we all know that's where the crud gets a hold...

Assess your contractor properly for his knowledge of waterproofing showers, and for ventilation and drainage planes. I suspect you have a lot of issues that will be found during demolition. You’d better have a contingency fund equal to the 60K bath project that you are planning. If I were you, I’d start tearing up some walls next to the shower and tub. And anywhere else that trouble might be hidden. Like under windows. If you know you have issues, the only thing that will surprise you for a change order is the SIZE of those issues.

https://www.ceramictilefoundation.org/homeowners-guide-to-hiring-qualified-tile-installer

If you have that much mold, then you need to call in a mold remediation company. they will check all the walls and see why it's so persistent.

You actually have to do that anyway. a professional remediation company is supposed to be called out anytime you find mold on a remodel.

as for mold being carried in the water, this is from that link that Judy posted

How to Remove Mold From Your Pipes

Water pipes are always wet and dark, which makes it impossible to completely remove mold. However, with a few household items and regular maintenance, you can keep the growth of mold in your pipes under control and prevent health concerns.

Here are the steps you should follow to remove and prevent mold in your pipes:

• Pour half a cup of household bleach into your drain and allow it to sit for at least one hour.
• Boil two cups of water and pour down the drain, then run the hot water from the tap for several minutes.
• Pour a quarter-cup of baking soda into the drain.
• Pour one cup of vinegar into the drain and allow it to sit for 15 minutes, which gives the combination of baking soda and vinegar sufficient time to kill the mold.
• Boil two more cups of water and pour into the drain, then run the hot water for several minutes.

These steps may be repeated as needed. You may use this mold-prevention method as often as once a week, but it’s recommended to do it at least once a month to prevent the growth and spread of mold and maintain healthy pipes.

Beth is correct you need a Mold Remediation Company that is HazMat compliant and state licensed for Mold remediation. before you can move forward with your renovation. Once that is done do yourself a favor and invest in having a dehumidifying system installed in your home.

Thanks for the tips everyone! Judy, thanks for that article! People keep telling me I'm crazy, we have city water so no way could it have mold in the pipes. Maybe it's time to get it tested, just to be sure.

To answer some questions:

We aren't touching the exterior of the home unless we have to due to mold issues.

We are well-prepared to find mold, dry-rot, and all manner of issues once we rip the shower out. The good news is it's not in the attic, because we can get up there and see that. And it isn't in the wall behind the faucet handle. But I suspect we will have to replace subfloor, insulation, and maybe some joists and framing. The only thing that would surprise me is if it isn't as bad as I think it is.

I can't start ripping it out yet though. We won't start the project until I've done a lot of research - demo may be 3-4 months away or more if we find major problems. I do my homework. And I don't want to be without a shower for 9 months or forced to move ahead with the project before I'm ready. But the shower is above the garage, so to your point...I think at least I'll drill some holes in the garage ceiling drywall and get a look underneath before we start this.

The bathtub hasn't been used in years because it's one of those jetted-deals that spews black crud every time you turn it on. That's where the new shower is going. I can see under the tub, it's all good, so at least there we are starting fresh there.

It's a good point that mold remediation may be necessary...We've done it in the past with my mothers house, so I'm familiar with that process and the lengths they go to to eradicate it. I'll be prepared for this.

.I'll look into the dehumidifying system too. This is an avenue I haven't explored yet.

Thanks everyone!

Here in coastal Virginia, mold and mildew grow on everything--even slow golfers.

The key to preventing mold growth is controlling moisture in your home. First, make sure there are no plumbing leaks. Next, make sure moisture point sources such as cooktops and showers have appropriate ventilation fans installed--and use them to exhaust moisture. Third, control the relative humidity in your home. You may find that your air conditioner alone can't keep the relative humidity below 50% (a good target level to preclude mold growth) particularly in shoulder seasons when little if any air conditioning is required. If that's the case, consider installing a dehumidifier integrated with your HVAC system.