An aquatic hyphomycete, Dwayaangam sp., was isolated from superficially sterilized black spruce (Picea mariana) needles submerged in aerated water in a small glass chamber (microcosm). The internal transcribed spacer (ITS) sequence of this fungus and of a commonly encountered foliar endophyte isolated from P. mariana showed a high degree of similarity. When sporulation was induced in the microcosm, both the aquatic hyphomycete and the endophyte isolate produced similar aquatic conidia after 30 days, which is longer than previously documented in similar studies. Without the use of molecular tools, the link between the aquatic and endophytic phases of the fungus would have gone unnoticed. This is the first time that a fungal endophyte of conifer needles has been shown to have an aquatic phase. Its presence both as a foliar endophyte and a sporulating aquatic fungus suggests an alternating life cycle between the two environments.