The asexual taxon Phialolunulospora vermispora gen. et sp. nov., collected from submerged dicotyledonous leaves in Hainan, China, is described and illustrated herein. Phialolunulospora gen. nov. is characterized by macronematous, semimacronematous, septate and pigmented conidiophores and acrogenous, long lunate, vermiform to sigmoid, hyaline conidia with an eccentric basal appendage. Complete sequences of internal transcribed spacer (ITS) and partial sequences of nuclear large subunits ribosomal DNA (LSU) genes are provided. Phylogenetic analyses of combined ITS and LSU sequences revealed its placement in the Chaetosphaeriaceae. The new fungus is compared with morphologically similar genera.