Integrative taxonomic studies of macrofungal diversity in the Brijuni National Park (Istria County, Croatia) led to the discovery of a second species of Inocybe (Agaricales, Inocybaceae) new to science. Inocybe istriaca sp. nov. is described on the basis of morphological, ecological, and multigene phylogenetic analyses, and its placement within the family Inocybaceae is discussed. The combination of most important morphological characters that distinguish I. istriaca from the other similar Inocybe species are smooth, (sub)amygdaliform, (sub)phaseoliform, or ellipsoid basidiospores (ca. 8.5–12 × 5–7 μm), large basidia (36–45 × 9–15 μm), mostly (sub)fusiform and weakly thick-walled (up to 1.5 μm) metuloid pleurocystidia, and lamellar edge and stipe apex partially covered by a dark resinous substance. The species was collected on the edge of grassland and Mediterranean evergreen holm oak (Quercus ilex) forest. In this study, a total of 14 DNA sequences from four Inocybe species were generated. Two-gene (ITS, LSU) and four-gene (ITS, LSU, rpb2, tef1) phylogenetic analyses confirmed the status of I. istriaca as an independent species.