Brown root rot disease - dubbed the Sars of trees - has spread to 11 districts in the past nine months, infecting some of the city's most valuable trees and forests.
Tree experts warn the problem may require the widespread removal of trees, like the mass cull of chickens during the outbreak of H5N1 bird flu.
Apart from killing 17 heritage trees in urban areas, the incurable fungal condition has infected at least seven trees in Tai Po Kau Nature Reserve, one in the Observatory grounds in Tsim Sha Tsui and probably some in Kam Shan Country Park.
"A meticulous programme of containment has to be implemented immediately," University of Hong Kong tree specialist Jim Chi-yung said. "In the end, we may face the removal of large pieces of forest, resulting in an ecological disaster, which has happened in the US and Taiwan. It's like when poultry were killed in bird flu pandemics."
Tree specialists are worried that the disease - spread through the air and soil - will eat up forests. They say it also highlights the government's inability and lack of transparency in dealing with the widespread infection.
The disease went almost unnoticed by the public until last July, when it led to the collapse of a century-old banyan in Park Lane Shoppers' Boulevard, Tsim Sha Tsui, injuring five people.
On a visit to Kam Shan Country Park last week with an arborist, the South China Morning Post found dozens of trees along Tai Po Road with sparse foliage. On some, the bottoms of the trunks had darkened and were peeling off.
"The bark has become spongy, an obvious symptom of the disease," said the arborist, who examines trees for the government and wanted anonymity. Specialist Jim shared his view.
In an initial reply the Agriculture, Fisheries and Conservation Department said that its inspectors had not spotted any trees with symptoms. The Water Supplies Department had, however, removed 11 mature trees found dead in the country park next to the Kowloon Reservoir.
Both departments and the tree office blamed the macaque monkeys that frequent the area.
"The deaths [are] mainly because monkeys … have eaten their buds and leaves … thus impeding the production of nutrients that support the growth of the trees," the office said.
But the AFCD said on Wednesday, after receiving pictures of sick trees provided by the Post, that it suspected two of the trees in the country park were infected with brown root rot and would be removed.
It added that the infected site in the Tai Po Kau reserve had been fenced off from visitors to prevent the disease spreading through infected wood debris in soil.
The office said it had received information on 31 infections from 11 of the city's 18 districts. At least nine species have been attacked by the fungus, mostly Chinese banyans.
The tree office said it was premature to conclude that the disease had already spread all over Hong Kong. But Jim, an adviser to the office, said the prevalence showed the disease might have become endemic in Hong Kong, meaning it had become established and self-sustaining.
Conservancy Association tree specialist Ken So Kwok-yin said the infections were alarming.
"They shouldn't have let it spread to the country parks. The closer it is to the natural environment, the more difficult it is to contain the disease," he said.