Saitoella coloradoensis sp. nov. (NRRL YB-2330, CBS 12360, type strain, MycoBank accession number 563858) is described. This new member of the phylum Ascomycota, subphylum Taphrinomycotina was isolated from insect frass occurring in an Engelmann spruce (Picea engelmannii) that was growing in Colorado, USA. Multigene sequence analysis showed that S. coloradoensis is distinct from Saitoella complicata, the only other known species of Saitoella. The two species may be separated phenotypically from growth reactions on D: -xylose, ribitol and methyl-α-D: -glucoside. Asexual reproduction is by budding and both species produce thick-walled, spherical cells that appear morphologically similar to the ascogenous cells formed in plant host tissue by species of Protomyces and some species of Taphrina. The thick-walled cells did not form ascospores but did produce buds when placed on fresh growth media.