Mushroom Jin Er has attracted widespread attention in Asia over the past two decades due to its medicinal properties and nutritional values. In the present study, Jin Er basidiocarps were often found to be surrounded by Stereum hirsutum fruiting bodies in their natural habitat and occasionally in artificial cultivation. The observation of two different kinds of mycelia within the hymenium and analyses of ITS sequences confirmed that Jin Er basidiocarps were composed of two fungal species, Naematelia aurantialba and S. hirsutum. This heterogeneity of Jin Er fruiting bodies is indeed distinct from the homogeneous hypha of Tremella fuciformis found in Yin Er mushroom, although its development also requires the presence of another fungus Annulohypoxylon stygium. Basidiospores can germinate on the surface of basidiocarps and produce mycelia. However, basidiospores in PDA medium can only bud into yeast-like conidia. The yeast-like conidia of N. aurantialba can transform into pseudohyphae with a change in temperature from 20 °C to 28 °C or switch into filamentous cells on an induction medium (IDM) at 20 °C, 25 °C and 28 °C. This dimorphic was reported for the first time in N. aurantialba. Haustorium-like structures were abundantly observed both within the hymenium and in the aerial mycelia cultured on the IDM. The developmental process was documented firstly in this study, involving the formation of protuberances with basal clamp connections, elongation at the protuberances, branch production, and eventual maturation. However, further observation is required to determine whether the haustorium-like structures can penetrate S. hirsutum hyphae. These findings are expected to provide valuable insights into the relationship and interaction between these two fungi, thereby advancing the cultivation of fruiting bodies.