Blue mold is a fungus disease caused by Penicillium expansum. It is the most important postharvest decay of stored apples in the United States. The losses from this disease can be significant but can be substantially reduced by following proper sanitation and control measures. The fungus not only causes fruit decay but also produces the carcinogenic mycotoxin patulin. This toxin may rise to unacceptable levels in fruit destined for processing and may also result in off flavors. For more information, see this article on Blue Mold on Apple.
Answer provided by Alan R. Biggs, West Virginia University.