I wrote this as a reply on a thread at GW back in '08. Hopefully, you don't have the disease, but perhaps this will add a little perspective and keep anyone from panic:
Yes, you CAN catch Sporotrichosis, which is a fungal infection, from handling sphagnum moss. It's often referred to as the Rose Gardener's Disease, since thorn pricks are a common way of introducing the fungus - barberry and brambles like blackberry and raspberry are also known sources. The fungus is also commonly found in soil, on flowers and shrubs, on wood products, timber, forest litter, and a variety of mosses, so it is almost certain it could be found in any potting soils that include any of these products (most commonly do). The most common source of infection is the house cat.
It should also be understood that not all sphagnum moss carries Sporotrichosis. The Wisconsin Division of Health, Bureau of Community Health and Prevention (BCHP), investigated a 1981 diagnosis of Sporotrichosis found in two brothers employed at a garden centre in Wisconsin. The investigation revealed two additional cases of Sporotrichosis among the employees.
The garden center had sixteen workers make funeral wreaths during the Winter of 1980. The infected moss used was harvested from bogs located in central Wisconsin and was purchased from a single wholesale dealer. However, in an investigation of a local cemetery where 12 employees produced 2,000-3,000 wreaths per autumn using sphagnum moss purchased from the same Wisconsin supplier, no additional cases were noted. Again, use your own judgment, but it appears that the source of the outbreak was limited to just one bad batch of sphagnum from a wholesale dealer who had also supplied countless quantities of Sphagnum moss that was completely free of Sporotrichosis.
Bear in mind that the risk of Sporotrichosis is very small; in the US the incidence of infection is not precisely known but is estimated at only 1-2 cases per million people, and most of those cases are from sources OTHER than sphagnum moss. An estimated 200-250 cases occur per year, nationwide. Statistically speaking, it is far more dangerous to cross the road than to handle the moss.
I know you'll use your own good judgment and common sense when/if you use it, but it is an effective anti-fungal/antibacterial medium, acting against those strains/species of fungi/bacteria that cause problems when we are trying to root.
It's been used as a wound dressing for hundreds of years, and as a favored medium of experienced horticulturists for rapidly inducing roots in air layers and cuttings. Bonsai practitioners have long used it as intensive care for trees that have contracted root rot because they were grown in heavy mediums with excessive water retention, commercially prepared and packaged potting soil being a primary offender. Sphagnum moss has excellent internal water retention properties, however unlike sphagnum peat, in its live form it is able to retain its open structure and so is fast draining and well aerated.
Less well known is that Sphagnum moss contains a high zinc content in the form of a naturally occurring antibiotics/anti-fungals called Tropolene and Sphagnan. The anaerobic bacteria common in heavier soils that cause the decay that inhibit woody cuttings from rooting are nullified by the antiseptic properties of Sphagnum moss. Hence, pure Sphagnum (without the addition of any other organic material) is considered by most experienced horticulturalists to be an excellent medium for root induction.
Al