We describe Diploschistes stereocaulorum as a new species of lichenized fungi growing on phyllocladia and stalks of Stereocaulon in the Pacific Northwest of North America. The larger ascospores of this species, the absence of a noticeable thallus, and the ITS barcode locus distinguish it from D. muscorum, which has been reported as growing on Stereocaulon, but has smaller ascospores and a distinct thallus. In phylogenetic reconstruction, the new species is sister to D. diacapsis, albeit without support. Key words: Diploschistes, lichenized fungi, new species, parasitic lichens, Stereocaulon.