The deep sedimentary biosphere, extending hundreds of meters below the seafloor harbors unexpected diversity of Bacteria, Archaea, and microbial eukaryotes. Far less is known about microbial eukaryotes in subsurface habitats, but several studies have indicated that fungi dominate eukaryotic communities. Poly-A enriched and whole-community metatranscriptome analyses of samples from 12 and 345mbsf from Canterbury Basin site U1352 reveal expression of fungal amino acid and peptide transporters, and genes associated with cell-division, stress tolerance, synthesis of secondary metabolites. Fungal community composition and metabolic activities appear to differ from those in samples from more organic-rich Peru Margin. We obtained the first images of septate fungal filaments, branching fungi, conidiogenesis and spores within preserved sediments from 4 and 403mbsf. Biolog® and ApiZym assays of fungi cultivated from Canterbury Basin subsurface sediments indicate isolates from shallower depths are able to efficiently use a wider array of substrates, particularly sugars, compared to fungal isolates from deeper layers. Results suggest that chitin may be more available at shallow depths in deep subseafloor sediments and that fungi are involved in its degradation. Fungi also appear to exhibit a lifestyle shift with depth. Fungi from shallow depths appear to be efficient organic matter decomposers, able to scavenge any kind of available substrate, while fungi from deeper layers have a more limited repertoire. This specialization may confer better capabilities to degrade complex refractory organic matter, such as, prokaryotic necromass. Some fungal isolates appear to be able to grow using peptidoglycan as their primary carbon source.