We collected a resupinate fungus lichenized with flamentous Rhizonema cyanobacteria in Amami-Oshima Island, Japan. Microscopic observations and molecular phylogenetic analyses of both the basidioma and the lichenized thallus indicated afnities within Cyphellostereum, the frst record of this basidiomycete genus from Japan. Its unique combination of structural characters and ITS rDNA sequences suggests a new species, described here as C. ushimanum. Light and transmission electron microscopic observations revealed tubular intracellular haustoria penetrating longitudinally within the cyanobacterial cells, a feature typically seen in the related genus Dictyonema, but unusual in Cyphellostereum. The generic circumscription of Cyphellostereum was therefore emended to include features of C. ushimanum and other recently described species that deviate from the conventional defnition of the genus. Ultrastructural details of symbiont interactions are provided for the frst time in this genus. We also succeeded in cultivating the fungus from hyphae regenerated from thallus fragments, and include a brief description of those results. Keywords: Athelia · Culture · Haustorium · Lichenized basidiomycetes · Rhizonema · TEM.