A new sequestrate fungus, Barcheria willisiana gen. et sp. nov., is described and its affinities evaluated using nLSU rDNA sequence data. This unusual fungus has several characters that are reminiscent of species of Agaricus and Lepiota, but with a very reduced basidiome form. The nLSU rDNA of four Australian taxa, Barcheria willisiana, Agaricus xanthodermus, Leucoagaricus naucinus, and Lepiota discolorata, was sequenced for this study. Parsimony analysis of the sequences placed Barcheria within an Agaricus clade.