Lethargic crab disease (LCD) has caused extensive epizootic mortality of the mangrove land crab Ucides cordatus (Linnaeus 1763) (Brachyura: Ocypodidae) along the Brazilian coast. Direct culture of tissue samples from sick crabs and subsequent isolation and purification identified the causative agent as an Exophiala species of fungus. The histopathology of crabs with variable signs of LCD indicates that the most affected tissues are the epidermis, connective tissue, heart, hepatopancreas, nervous system, and gills. Gonads, somatic muscles, and digestive system are less affected by the fungus. The observed pathology is compatible with the clinical signs of LCD. Necrosis, tissue degeneration, and congestion of hemal sinuses and vessels are present in heavily infected organs. Nerve fibers may be compressed by accumulations of yeast-like cells. In heavy infections the tissue of gill lamellae is destroyed with subsequent dilation or compression. Cellular immune responses include hemocytic infiltration, agglutination and encapsulation, and phagocytosis. Phagocytosis of yeast-like cells is abundant in the connective tissue associated with the exoskeleton. These results indicate that LCD is the result of a systemic phaeohyphomycosis caused by a species of Exophiala. The present study also suggests that dispersal of the fungus within the crab occurs through the hemal system.