The filamentous ascomycete Xeromyces bisporus is an extreme xerophile able to grow down to a water activity of 0.62. We have inferred the phylogenetic position of Xeromyces in relation to other xerophilic and xerotolerant fungi in the order Eurotiales. Using nrDNA and betatubulin sequences, we show that it is more closely related to the xerophilic foodborne species of the genus Chrysosporium, than to the genus Monascus. The taxonomy of X. bisporus and Monascus is discussed. Based on physiological, morphological, and phylogenetic distinctiveness, we suggest that Xeromyces should be retained as a separate genus.