The genus Kondoa Y. Yamada, Nakagawa & Banno was erected to accommodate a single taxon, K. malvinella (Fell & Hunter) Y. Yamada, Nakagawa & Banno, which was transferred from the teliospore-forming genus Rhodosporidium Banno based on pronounced differences in the 5S and 26S ribosomal RNA (rRNA) nucleotide sequences to R. toruloides Banno. In contrast with the original description, reinvestigation of K. malvinella revealed the formation of transversely septate (auricularioid) basidia that did not arise on teliospores, but formed directly on the dikaryotic mycelium. The four-celled basidia developed sterigmata on which forcibly discharged asymmetric basidiospores (ballistospores) were produced. Additionally, a new taxon emerged from the study of recent isolates, for which the name K. aeria sp. nov. is proposed. This new species produced two-celled auricularioid basidia on hyphae with incomplete clamp connections. Ballistospores arose on the basidia at the tip of sterigmata and, after ejection, germinated by budding. These observations led us to present an emended diagnosis for the genus Kondoa. Analysis of the sequence data from the D1/D2 region of the 26S rRNA gene showed a very close resemblance between K. aeria and K. malvinella in a cluster that also contained several Bensingtonia species. Taxa in this cluster share specific physiological traits and produce characteristic pinkish-cream to mauve colonies; in contrast, formation of ballistoconidia is only observed in the Bensingtonia species. Sequence data supported placement of K. malvinella and K. aeria in the 'Agaricostilbum clade' of the Urediniomycetes.