A new wood-inhabiting fungal species, Scytinostroma yunnanense, is proposed based on morphological and molecular evidences. The species is characterized by an annual growth habit, resupinate basidiomata with cream hymenial surface, a monomitic hyphal system with generative hyphae bearing simple septa, fusiform to cylindrical cystidia and basidiospores (4.5–5.5 × 4.2–5.2 µm) are acyanophilous, subglobose to globose, hyaline, thin-walled, smooth, amyloid. The phylogenetic analyses based on molecular data of ITS sequences showed that the new species formed a monophyletic lineage with a strong support (100% BS, 100% BP, 1.00 BPP) and then was sister to S. duriusculum.