Mangrove forests inhabit the shoreline regions of tropical and subtropical marine habitats, where they are the basis of a multi-trophic level food web that drives the shellfish and fisheries industries. Yeasts, and other fungi, have significant roles in these ecosystems as they decompose plant organic material and serve as a food source for small invertebrates. Studies designed to examine yeast communities of mangrove regions of the Florida Everglades and the Bahamas demonstrated the repeated presence of an undescribed teleomorphic basidiomycetous yeast. The yeast is heterothallic, with a sexual cycle that can be observed on artificial media. Mating between compatible pairs produces polymorphic basidia. Some basidia are globose, ovoid or lageniform, with longitudinal to oblique and transverse septa, whereas other basidia are navicular with one to three transverse septa. Basidiocarps and ballistoconidia are absent. Molecular sequence analysis of a partial region (D1/D2 domains) of the large subunit rRNA demonstrated that the yeast is phylogenetically distinct from other teleomorphic Tremellales with close relationships to the anamorphic species Cryptococcus dejecticola, Cryptococcus bestiolae and Bullera dendrophila. The molecular and phenotypic data indicate that this teleomorph should be classified in a novel genus. Therefore, Kwoniella mangroviensis gen. nov., sp. nov. (Type strain CBS 8507), is proposed.