Many species of dimorphic basidiomycetes are known only in their asexual phase and typically those pigmented in different hues of red have been classified in the large polyphyletic genus Rhodotorula. These yeasts are ubiquitous and include a few species of some clinical relevance. The phylogenetic distribution of Rhodotorula spans three classes: Microbotryomycetes, Cystobasidiomycetes and Exobasidiomycetes. Here, the presented multi-gene analyses resolved phylogenetic relationships between the second largest group of Rhodotorula and the mycoparasite Cystobasidium fimetarium (Cystobasidiales, Cystobasidiomycetes, Pucciniomycotina). Based on the results, we propose the transfer of nine species belonging to the Rhodotorula minuta clade into the genus Cystobasidium. As a result, the clinically relevant species R. minuta will be renamed Cystobasidium minutum. This proposal follows ongoing reassessments of the anamorphic genus Rhodotorula reducing the polyphyly of this genus. The delimitation of the R. minuta clade from Rhodotorula species comprised in Sporidiobolales including the type species Rhodotorula glutinis is an important step to overcome obsolete generic placements of asexual basidiomycetous yeasts. Our proposal will also help to distinguish most common red yeasts from clinical samples such as members of Sporidiobolales and Cystobasidiales. The diagnosis of the genus Cystobasidium is amended by including additional characteristics known for the related group of species. The taxonomic change enables us to classify two novel species with the phylogenetically related members of the R. minuta clade in Cystobasidium. The recently from natural environments isolated species are described here as Cystobasidium psychroaquaticum f.a. sp. nov. (K-833(T) = KBP 3881(T) = VKPM Y-3653(T) = CBS 11769(T) = MUCL 52875(T) = DSM 27713(T)) and Cystobasidium rietchiei f.a. sp. nov. (K-780(T) = KBP 4220(T) = VKPM Y-3658(T) = CBS 12324(T) = MUCL 53589(T) = DSM 27155(T)). The new species were registered in MycoBank under MB 809336 and MB 809337, respectively.