Vaginatispora microarmatispora sp. nov. (Lophiostomataceae) is a new saprobic marine fungal species found on dead intertidal wood of Aegiceras corniculatum collected from Muthupet mangroves, Tamil Nadu, along the south-east coast of India. This species has characters similar to other species of the genus Vaginatispora, but differs in ascospore dimensions. Phylogeny inferred from a combined LSU, SSU, ITS and TEF1 sequence dataset reveal a close association of the new taxon to species of Vaginatispora, but as a distinct lineage. Hence, in this paper, we introduce the new species with illustrations, descriptions and comparison with related taxa. A synopsis of characters of all Vaginatispora species along with a dichotomous key are also provided.