Technical Abstract: During a study on the fungal endophytic associations with some trees of the secondary forest of El Eden Ecological Reserve located in the northeastern Yucatan Peninsula of Mexico, a new fungal species was isolated as an endophyte of a tree named chakah, chachah or hukúp (Bursera simaruba) by indigenous Mayas. This fungus is characterized by producing a strong musty odor and absence of reproductive structures. Cultures of this fungus on PDA form a whitish, flocculose colony with an uncolored reverse and a mycelium that grows slowly. Scanning electron microscopy photographs showed in aerial and submerged mycelium the early formation of unique intercalary swollen, thin-walled, rugulose hyphae. Based on morphological and DNA sequence analyses, the Mexican isolate is a member of the Xylariales with high similarity to Muscodor albus and the related species Muscodor vitigenus, but with distinct differences not previously described, therefore, Muscodor yucatanensis sp. nov. is described and illustrated.