An organism commonly referred to as 'megabacterium' colonizes the gastric isthmus of many species of birds. It is weakly gram-positive and periodic acid-Schiff-positive and stains with silver stains. Previous studies have shown that it has a nucleus and a cell wall similar to those seen in fungi. Calcofluor white M2R staining suggests that the cell wall contains chitin, a eukaryote-specific substance, and rRNA in situ hybridization demonstrates that it is a eukaryote. To characterize this organism phylogenetically, DNA was extracted from purified cells. rDNA was readily amplified by PCR with pan-fungal DNA primer sets and primer sets derived from the newly determined sequence, but not with bacteria-specific primer sets. Specific primer sets amplified rDNA from isthmus scrapings from an infected bird, but not from a non-infected bird or other control DNA. The sequence was confirmed to derive from the purified organism by in situ rRNA hybridization using a specific probe. Phylogenetic analysis of sequences of the 18S rDNA and domain D1/D2 of 26S rDNA showed the organism to be a previously undescribed anamorphic ascomycetous yeast representing a new genus. The name Macrorhabdus ornithogaster gen. nov., sp. nov. is proposed for this organism. The type material is CBS 9251T (= NRRL Y-27487T).