Gymnomyces xerophilus sp. nov., a sequestrate species in the Russulaceae, is characterized and described morphologically as a new species from Quercus-dominated woodlands in California. ITS sequences recovered from healthy, ectomycorrhizal roots of Quercus douglasii and Q. wislizeni matched those of G. xerophilus basidiomata, confirming the ectomycorrhizal status of this fungus. Phylogenetic analysis of the ITS region places G. xerophilus in a clade with both agaricoid (Russula in the section Polychromae) and sequestrate (Gymnomyces, Cystangium) relatives. We include a dichotomous key to the species of Gymnomyces associated with Quercus.