The etiologic role of Malassezia furfur in onychomycosis is a contentious diagnostic problem because its keratinolytic ability has never been verified. This case report describes the isolation of M. furfur from the infected nails of a child clinically diagnosed with onychomycosis, and discusses the role of this organism as an etiologic agent/colonizer. The patient presented with subungual hyperkeratosis and onycholysis without associated paronychia. Budding yeast cells compatible with M. furfur were repeatedly demonstrated in KOH wet mounts of damaged nails, histopathology of hematoxylin and eosin (H&E) and periodic acid-Schiff (PAS) stained sections showed penetration of fungal elements between deeper layers of keratin, and numerous colonies of M. furfur were isolated on three consecutive occasions from nail specimens collected from different areas of hand and toenail lesions. No evidence of nail invasion by dermatophytic or nondermatophytic filamentous fungi were found by direct microscopy or culture. Microscopy and culture were negative following 12 weeks of ketoconazole treatment, which resulted in growth of healthy nail plates with normal beds. We can infer from these observations that M.furfur was an etiologic agent rather than a colonizer in the patient's nails even though direct keratinolytic character of this fungus was not demonstrated.