Two yeast strains (TM2-16 and PT1-17(T)) were isolated by membrane filtration from samples of estuarine water collected from two mangrove forests, in Khao Lumpee-Haad Thaimueang National Park and Mu Ko Ra-Ko Prathong National Park, Phang-Nga Province, Thailand. Analysis of the D1/D2 domain of the large-subunit rDNA sequences revealed that the sequences of the two strains were identical. The closest species in terms of pairwise sequence similarity was Candida galli, but the level of nucleotide substitutions (13.2 %) was sufficient to justify the description of a separate species. Phylogenetic analysis demonstrated that the two strains occupy a basal position with respect to Yarrowia lipolytica and C. galli of the Yarrowia clade, supported by a high bootstrap value. The two strains showed identical phenotypic characteristics, including proliferation by multilateral budding, absence of ascospores and ballistoconidia and negative Diazonium blue B and urease reactions. The major ubiquinone was Q-9. On the basis of the above findings, these two strains were assigned to a single novel species of the genus Candida, for which the name Candida phangngensis sp. nov. is proposed. The type strain is PT1-17(T) (=BCC 21306(T) =NBRC 101970(T) corrected =CBS 10407(T)).