Dark septate root endophytic fungi from plants growing on either side of an abrupt wetlandupland ecotone included isolates of Phialocephala fortinii Wang & Wilcox, Leptodontidium orchidicola Sigler & Currah, Hetero conium chaetospira (Grove) Ellis, and a hitherto undescribed fungus resembling P. fortinii. Six isolates of this species were recovered and were distinctive in (i) producing an orangetan diffusible pigment in culture, (ii) causing a yellow colour shift on casamino acids medium containing bromocresol purple, (iii) having the ability to liquefy gelatin, and microscopically, (iv) forming hyaline conidia from phialides arranged in large spherical heads after prolonged incubation at 5 °C. First-formed or primary conidia are bullet shaped, 11.5 µm × 23 µm; subsequent conidia are spherical and 11.5 µm in diameter. Small subunit and internal transcribed spacer region sequence comparisons with P. fortinii and other Phialocephala species supported placing these six unique strains in a new species, Phialocephala sphaeroides B.J. Wilson sp. nov. Phylogenetic analyses also suggest that P. sphaeroides is affiliated with mollisioid taxa in the Dermateaceae. In contrast with P. fortinii, which was isolated on both sides of the ecotone, P. sphaeroides was obtained only from plants in the highly acidic, Sphagnum-dominated wetland habitat and not from the same species in the less acidic, aspen-dominated upland site.Key words: inoperculate discomycetes, phialidic anamorph, Helotiales, root endophytes, Loramycetaceae, Dermateaceae, Mollisia.