An outbreak of disseminated granulomatous disease occurred in a group of veiled chameleons (Chamaeleo calyptratus) in a zoo collection. An adult female and six offspring developed large granulomas in multiple organs and were euthanized. At necropsy, roughly spherical yellow-to-white nodules 1 to 3 mm in diameter were grossly visible in the liver and other organs. Histopathology revealed fungal elements that were spherical to ovoid in shape, fragments of slender to irregularly swollen hyphae, and occasional conidia produced on phialides. Fungal isolates were initially suspected on the basis of morphology results to represent Paecilomyces viridis, a species known only from one outbreak of fatal mycosis in carpet chameleons (Furcifer lateralis). Data obtained from morphological studies and from phylogenetic analyses of nuclear ribosomal rRNA (rDNA) sequence data revealed the Danish chameleon isolates to be a related undescribed anamorphic species within the family Clavicipitaceae that includes many insect pathogens. Chamaeleomyces granulomatis gen. et sp. nov. is given as the name for the newly described fungus, and P. viridis is transferred to the new genus as Chamaeleomyces viridis comb. nov. Chamaeleomyces species are distinguished by having basally swollen phialides tapering to a narrow neck, conidia in fragile chains, and pale green to greenish-gray colonies. Both species are dimorphic, producing a transitory yeast stage characterized by ovoid-to-subglobose or subcylindrical yeast-like cells. Chamaeleomyces species appear to be rare but aggressive pathogens of chameleons.