Circinaria terrenoides sp. nov. was collected in Balochistan and Gilgit Baltistan. Comparative morpho-anatomical research, chemical analysis, and ITS-based DNA analyses all support its placement within the genus Circinaria. Circinaria terrenoides sp. nov. is distinguished from the closely related species C. affinis in having a crustose, areolate to rimose-areolate thallus (vs. subfruticose, verrucose-areolate), earthy brown to greenish gray upper surface (vs. earthy gray to gray-green), smaller conidia 12–18 × 0.4–0.9 µm (vs. 16–20 ×1–1.2 μm), (vs. black to brownish), and growing on calcareous sedimentary rock (vs. stony steppes).