Coniochaeta pulveracea is a dimorphic lignicolous fungus that has mostly been isolated from decaying wood. However, relatively little work was conducted on the conditions for the dimorphic switch or the biological interactions of the fungus in its yeast-like microcyclic growth phase. Therefore, in this study, the microcyclic conidiation of C. pulveracea strains and representatives of the closely related species, Coniochaeta boothii and Coniochaeta subcorticalis, was studied under different environmental conditions. The strains were found to exhibit hyphal growth on solid substrates and underwent a dimorphic switch to produce microcycle conidiation upon transfer to a liquid medium which differed in physico-chemical composition compared to the original solid medium. Factors that were found to contribute to this dimorphic switch were temperature, pH and the presence of complex nitrogen sources such as casamino acids and peptone in the medium. However, C. pulveracea showed intraspecific differences with regard to its response to changes in the physico-chemical environment. The interactions of microcyclic Coniochaeta strains with selected yeasts, such as representatives of Meyerozyma guilliermondii and Cryptococcus neoformans, were subsequently studied in complex liquid media and it was found that, depending on medium composition, the microcyclic Coniochaeta exerted different effects on the different yeasts strains. In some co-cultures, a positive effect on yeast growth was observed, whilst in other cases microcyclic Coniochaeta inhibited yeast growth.