Understanding how species accomplish dispersal of their propagules can shed light on how they are adapted for their ecosystem. Guyanagaster necrorhizus is a sequestrate fungus, meaning its dispersal propagules, or spores, are entirely enclosed within a fruiting body, termed a sporocarp. This fungus is most closely related to Armillaria and its allies. While Armillaria species form mushrooms and have forcibly discharged spores, G.necrorhizus spores have lost this ability, and by necessity, must be passively dispersed. However, G.necrorhizus does not possess characteristics of other sequestrate fungi with known dispersal mechanisms. Repeated observations of termites feeding on G.necrorhizus sporocarps, and spores subsequently adhering to their exoskeletons, led to the hypothesis that termites disperse G.necrorhizus spores. To test this hypothesis, we used microsatellite markers and population genetics analyses to understand patterns of clonality and population structure of G.necrorhizus. While Armillaria individuals can spread vegetatively over large areas, high genotypic diversity in G.necrorhizus populations suggests spores are the primary mode of dispersal. Spatial genetic structure analyses show that G.necrorhizus sporocarps within 238m of each other are more closely related than would be expected by chance and conservative estimates from population assignment tests suggest gene flow no longer occurs between sporocarps separated by 2km. These distances are consistent with previous studies analysing foraging distances of the termites found associated with G.necrorhizus sporocarps. Termites have rarely been recorded to specifically target fungal sporocarps, making this a potentially novel fungal-insect interaction.