Peanut kernels of Homabay Local, Valencia Red, ICGV-SM 12991 and ICGV-SM 99568 cultivars were stored for six months in jute, polypropylene and polyethylene bags to assess the effect of storage bags, temperature and R.H. on fungal population and aflatoxin contamination. Moisture content (M.C.), fungal population and aflatoxin levels were determined before storage and after every 30 days during storage. Isolates of Aspergillus flavus and A. parasiticus were assayed for production of aflatoxin B1, B2, G1 and G2. The correlation between MC, population of A. flavus and A. parasiticus and aflatoxin levels in peanuts was also determined. Six fungal pathogens were commonly isolated from the peanut samples and occurred as follows in decreasing order: Penicillium spp. (106.6 CFU/g), A. flavus L-strain (4.8 CFU/g), A. flavus S-strain (2.9 CFU/g), A. niger (2.6 CFU/g), A. parasiticus (1.7 CFU/g) and A. tamarii (0.2 CFU/g). The overall population of A. flavus L-strain was 66% higher than that of A. flavus S-strain. Ninety one percent of A. flavus and A. parasiticus isolates produced at least one of the four aflatoxin types assayed, with 36% producing aflatoxin B1. Total aflatoxin levels ranged from 0 - 47.8 µg/kg with samples stored in polyethylene and jute bags being the most and least contaminated, respectively. Eighty nine percent and 97% of the peanut samples met the EU (? 4 µg/kg) and Kenyan (? 10 µg/kg) regulatory standards for total aflatoxin, respectively. Peanuts should be adequately dried to safe moisture level and immediately packaged in a container - preferably jute bags - which will not promote critical increases in fungal population and aflatoxin contamination.