Many Berberis species have been identified as alternate hosts for Puccinia striiformis f. sp. tritici. Importantly, susceptible Berberis species are determined to play an important role in the occurrence of sexual reproduction, generation of new races of the rust pathogen. However, little is known about Mahonia serving as alternate hosts for P. striiformis f. sp. tritici and their role to commence sexual reproduction of the rust fungus under natural conditions. Herein, three Mahonia species or subspecies, Mahonia fortunei, M. eurybracteata subsp. ganpinensis, and M. sheridaniana, were identified as alternate hosts for P. striiformis f. sp. tritici, and seven Mahonia species were highly resistant to the rust pathogen. We recovered seven samples of P. striiformis f. sp. tritici from naturally rusted Mahonia cardiophylla plants. Totally, 54 single uredinium (SU) isolates, derived from the seven samples, generated 20 different race types, including one known race type, and 19 new race types. SNP markers analysis showed that all SU isolates displayed high phenotype diversity (H = 0.32) with a high Shannon’s information index (I = 0.49). Analysis of linkage disequilibrium indicated an insignificant rbarD value (rbarD = 0.003, P < 0.1). As a result, all SU isolates are sexually produced, suggesting that P. striiformis f. sp. tritici parasitizes susceptible Mahonia to complete sexual reproduction under natural conditions. The role of Mahonia in occurrence of wheat stripe rust are needed to study for management of the disease.