During a survey of yeasts associated with wood-ingesting insects, six strains of the Sugiyamaella clade were isolated from the gut of passalid and tenebrionid beetles and the decayed wood inhabited by them. Phylogeny based on rRNA gene sequences placed these yeasts as members of Sugiyamaella smithiae, Sugiyamaella americana, Candida lignohabitans and a novel species closely related to Su. americana. The only strain of the novel species, EH008(T), could be unquestionably distinguished from its relatives by DNA sequences and other taxonomic characteristics. Ascospore production was not observed under the laboratory conditions tested. Therefore, this novel species is proposed as Candida bullrunensis sp. nov. (type strain EH008(T) = ATCC MYA-4660(T) = CBS 11840(T)).