Technical Abstract: This is a long term research project designed to result in the development of peanut cultivars with resistance to preharvest aflatoxin contamination (PAC). The initial objectives were to develop large-scale screening techniques to identify sources of resistance to PAC in peanut germplasm. Screening techniques were developed, and fifteen sources of resistance were identified. These sources of resistance were then used in a hybridization program to combine this resistance with acceptable agronomic performance. Several hundred F4:5 breeding lines were created and tested for resistance. Nine breeding lines were identified that had relatively low aflatoxin contamination and relatively high yield when subjected to late season drought stress. We have also conducted cooperative research with other research groups to attempt to develop indirect selection techniques for resistance to PAC. Promising results were observed in the characterization of gene expression of phospholipase D (PLD) which is associated with drought tolerance and possibly aflatoxin contamination in peanut. Promising results were also observed with research on the effect of resistance to the peanut root-knot nematode and reduced aflatoxin contamination. In 2002 we added five drought shelters, continued the hybridization and selection program, continued research on the development of an indirect selection tool for reduced aflatoxin contamination, and began late generation yield testing and evaluation of the PAC resistant breeding lines.