Mass culture of algae for the production of biofuels is a developing technology designed to offset the depletion of fossil fuel reserves. However, large scale culture of algae in open ponds can be challenging because of incidences of infestation with algal parasites. Without knowledge of the identity of the specific parasite and how to control these pests, algal-based biofuel production will be limited. We have characterized a eukaryotic parasite of Scenedesmus dimorphus growing in outdoor ponds used for biofuel production. We demonstrated that as the genomic DNA of parasite FD01 increases, the concentration of S. dimorphus cells decreases; consequently, this is a highly destructive pathogen. Techniques for culture of the parasite and host were developed, and the endoparasite was identified as the Aphelidea, Amoeboaphelidium protococcarum. Phylogenetic analysis of ribosomal sequences revealed that parasite FD01 placed within the recently described Cryptomycota, a poorly known phylum based on two species of Rozella and environmental samples. Transmission electron microscopy demonstrated that aplanospores of the parasite produced filose pseudopodia, which contained fine fibers the diameter of actin microfilaments. Multiple lipid globules clustered and were associated with microbodies, mitochondria and a membrane cisternae, an arrangement characteristic of the microbody-lipid globule complex of chytrid zoospores. After encystment and attachment to the host cells, the parasite injected its protoplast into the host between the host cell wall and plasma membrane. At maturity the unwalled parasite occupied the entire host cell. After cleavage of the protoplast into aplanospores, a vacuole and lipids remained in the host cell. Amoeboaphelidium protococcarum isolate FD01 is characteristic of the original description of this species and is different from strain X-5 recently characterized. Our results help put a face on the Cryptomycota, revealing that the phylum is more diverse than previously understood and include some of the Aphelidea as well as Rozella species and potentially Microsporidia.