In this paper, we described and illustrated a new species of lignicolous fungi, Distoseptispora hydei, found on decaying bamboo in Phitsanulok Province, Thailand. According to the phylogenetic results from combined sequence data (LSU, ITS and RPB2), the new species is distinct from other Distoseptispora species. Distoseptispora hydei is characterized by obpyriform to fusiform conidia with 7–9 distosepta and a hyaline, gelatinous sheath around the tip. Phylogenetic analyses and morphological comparisons with other species of Distoseptispora are provided in this study.