A survey of lignicolous freshwater fungi in Thailand resulted in the discovery of one new species in Parafuscosporella herein described as Parafuscosporella lignicola. It is characterized by sporodochial colonies, moniliform or ellipsoidal conidiophores, ellipsoidal or cylindrical conidiogenous cells, irregular ellipsoidal and dark brown conidia. Phylogenetic analysis based on the combined LSU, SSU and ITS sequence data support its placement in Parafuscosporella. The species formed distinct clade from the type species and represents as ninth species in Parafuscosporella. The results of the pairwise homoplasy index (PHI) test results revealed no significant genetic recombination (Φw = 1.0) between Parafuscosporella lignicola and the closely related P. lignicola and P. ellipsoconidiogena. A descriptions and illustrations of P. lignicola are provided.