A third species in the genus Phymastichus LaSalle (Hymenoptera: Eulophidae), Phymastichus holoholo sp. nov., is described from specimens endoparasitic on adult Xyleborus beetles in Hawaii. Plant and insect host records known for this species, and aspects of its searching, oviposition, and emergence behavior are discussed and illustrated with photographs and video. This new species, along with Phymastichus xylebori which is also present in Hawaii, has potential as a biological control agent against Xyleborus beetles where they are problematic. Of special interest is their potential as natural enemies of X. ferrugineus, X. affinis, and X. perforans, which have recently been implicated in possibly spreading Rapid hia Death in Hawaii. Some aspects of their potential use to combat this disease, as well as some important but as of yet unanswered questions, are discussed. Two observed instances of parasitism by the newly described species of beetles in the Euwallacea fornicatus species complex, Euwallacea fornicatus (sensu stricto) and Euwallacea perbrevis, are also reported.