Intestinal microsporidiosis in patients diagnosed with acquired immunodeficiency syndrome (AIDS) and having chronic diarrhea was first reported in 1985 and the associated microsporidian was named Enterocytozoon bieneusi. The intracellular developmental cycle of E. bieneusi in enterocytes has been demonstrated and many cases have been reported worldwide. This report presents the life cycle of a second intestinal microsporidian, associated with the same symptoms, in five AIDS patients. This new microsporidian also infects enterocytes but its pathology and morphology differ from that of E. bieneusi. It involves lamina propria macrophages, fibroblasts, and endothelial cells and can disseminate to infect other parts of the body, e.g. the kidney and gall bladder. The parasite cycle includes development of rounded uninucleate and elongated bi- or tetranucleate cells without the formation of plasmodial stages. Sporogony is similar to the more typical development of microsporidia with sporoblast morphogenesis occurring after the last cell division. The development of cells within chambers of a septate, honeycomb-like, parasite-secreted fibrillar network and surrounded by a parasitophorous vacuole, however, is unique to this microsporidian, justifying the establishment of a new genus and species, Septata intestinalis n. g., n. sp.