Two strains of an asexual cellobiose-fermenting yeast species were isolated from rotten wood samples collected in Funiu Mountain Nature Reserve in Henan Province, central China. Molecular phylogenetic analysis that included the nearly complete small subunit (SSU), the internal transcribed spacer (ITS) region and the D1/D2 domains of the large subunit (LSU) rDNA showed that these strains belonged to the Candida kruisii clade, with Candida kruisii and Candida cretensis as their closest phylogenetic neighbours. The nucleotide differences between the novel strains and the type strains of C. kruisii and C. cretensis were 30 and 36 substitutions, respectively, in the D1/D2 LSU rDNA, 40 and 44 substitutions, respectively, in the ITS region and 19 and 23 substitutions, respectively, in the SSU rDNA. The novel strains can also be distinguished from their closest described species, C. kruisii and C. cretensis, by a number of physiological characteristics, and represent a novel species of the genus Candida, for which the name Candida funiuensis sp. nov. is proposed. The type strain is NYNU 14625T ( = CICC 33050T = CBS 13911T). The Mycobank number is MB 811503.