A new species, Hypocrella panamensis, is described from collections and cultures obtained on Barro Colorado Island, Panama. In order to aid in placement of this fungus, phylogenetic analyses were conducted using LSU (rDNA) sequences. Hypocrella panamensis is characterized by possessing pulvinate stromata with a Lecanicillium-like anamorphic state and superficial perithecia. Hypocrella panamensis consistently grouped in a clade containing Hypocrella nectrioides, H. phyllogena, and H. africana (100% PP). Most species of Hypocrella possess Aschersonia or Hirsutella anamorphs. Hypocrella panamensis is unique in the genus Hypocrella in possession of a Lecanicillium-like anamorphic state. In its biological habit Hypocrella panamensis is similar to other species in Hypocrella in that it infects and degrades the scale insect, then grows superficially on nutrients that emerge to the plant surface through the stylet wound.