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I have three of my Koi who have "cotton balls" growing on their dorsal fins. I assume this is a fungal problem. My pond is 9000 gal and I have 25 fish in it.
Cotton wool disease could be any of three disorders -

Epistylis - a microscopic parasite which can grow in dense bundles and appears the same as cotton wool disease.

Saprolgenia - Fungus organisms which require a fish with a compromised immune system to grow on the fish, and which only grow in damaged areas of the skin.

Flexobacterial infection - the Flexobacteria grow in stacks and these can appear grossly as cotton wool.

Minimizing stress to the fish should be your primary goal.

First, test your water and follow most of the evaluation steps in the first aid page. (Look it up!)

If your water quality cannot be incriminated, then consider the above three diseases. One treatment which would go the furthest to solve this would be salt.

If this doesn't appear to be effective, you could try the "every four day" potassium permanganate regimen which is effective for all three pathogens above, however it represents more stress to the fish.

There are other ways to handle this, but I'd stress water quality first and then the other treatments.

IMPORTANT: Since all the lesions are on the dorsal fins, you should examine the pond for a cinder block or other obstacle the fish are plainly swimming through, or under, creating abrasions on the dorsal fin area. Saprolgenia and cotton wool bacteria almost CANNOT infect intact skin.

Fish disease problems? Need some help? The help pages take you through the basics of the 'fish health work-up' diagnosis method and basic fish disease treatment methods.

90% of all health problems and fish deaths are caused by poor fish keeping! The key pages are essential reading for all beginners and intermediates who are serious about disease prevention.

Expanded Content by Dr. Erik Johnson, and Used with Permission; Frank Prince-Iles ©2009 All Rights Reserved