Light and electron microscopy showed that the reticuloperidium of thick-walled hyphae, characteristic of the mature ascoma of Auxarthron conjugaturn, originated from branches that grew from the broad, gyre-like hyphal loops making up the ascomatal initials. Within the developing peridium, short, acropetally proliferating chains of prototunicate asci each arose from a single crozier and matured from base to tip. The walls of young asci were two-layered but evanesced as they matured with the outer layer dissolving before the inner one. Distal asci in some chains retained the inner wall, detached from adjacent asci by septum schizolysis and when transferred to fresh media produced germ tubes and mycelium. Ultraviolet epifluorescent staining with a DNA intercalator (Hoechst) indicated that these spore-like asci probably contained diploid nuclei. In normal asci, ascospores had an inner, electron lucent primary wall and a three-layered secondary wall. The deposition pattern of the middle layer of the secondary wall created the distinctive array of pits and ridges characteristic of the ascospores in this taxon. The production of ascospores, spore-like asci and arthroconidia, along with the tendency of ascospores to adhere in a mass, is interpreted as contributing to the reproductive flexibility and inoculum potential of A. conjugatum. In all respects the ascomata of A. conjugatum differed substantially from the morphologically similar taxon, Myxotrichum arcticum. These findings underscore the benefit of using DNA-based phylogenies in concert with cytological and ultrastructural observations for exploring selective pressures behind homoplasious characters and revealing novel structural features.