Tubaria keralensis sp. nov. is described from Kerala State, India based on morphology and molecular phylogeny. Comprehensive description, photographs, and comparisons with phenetically similar and phylogenetically related species are provided. Tubaria keralensis is characterized by its strongly intervenose lamellae with concolorous edges; a stipe with velar remnants and a white, strigose basal mycelium and broadly ellipsoid to ovoid basidiospores. Nuclear ribosomal internal transcribed spacer region (nrITS) and nuclear ribosomal large subunit (nrLSU) gene region were sequenced and analyzed. Maximum likelihood (ML) analysis of combined nrITS and nrLSU sequence data revealed the novelty of the species as well as its placement in the T. furfuracea complex. The present discovery of T. keralensis forms the second report of a new Tubaria species from Kerala.