Temperature and water potential are critical factors influencing the germination of Sporisorium scitamineum teliospores and subsequent crop infection. This paper reports on the effect of temperature, water potential and incubation time on S. scitamineum teliospore germination. A field trial was conducted to determine the influence of temperature and length of exposure to teliospores on smut incidence. A 200 μL aliquot of teliospore (1.5 × 106 teliospores/mL) was cultured on water agar (WA) amended by potassium chloride (KCl) or sucrose. The plates were incubated across a range of temperatures and incubation times. For the field trial, sugarcane setts were inoculated and incubated at different temperatures and for varying incubation periods. The results demonstrated that germination decreased with declining water potential with either KCl or sucrose. The greatest germination (95.8%) occurred on unamended WA incubated at 30°C for 6 h. Even at the lowest water potential of −45 bars and 30°C, 50% teliospores were still able to germinate. These results indicate that 30°C is the optimum temperature for teliospore germination and that S. scitamineum may still germinate in fairly dry conditions. However, high temperatures (40°C), greatly reduce S. scitamineum germination. These results are consistent with field trial outcomes, which showed that the highest disease incidence (40.4%) occurred when temperature of inoculation was maintained at 30°C. On the other hand, the incidence was significantly reduced to 5.7% at 35°C. The results suggested consistent conditions for teliospore germination and sugarcane bud infection, with a temperature of 30°C being optimal for both.