Cordyceps cardinalis, a pathogen of lepidopteran larva, is described as a new species from the southern Appalachian Mountains of the eastern United States and from southeastern Japan. It is macroscopically similar to both C. militaris and C. pseudomilitaris, however, microscopic, cultural and molecular evidence support it being a phylogenetically distinct species. Cordyceps cardinalis is most similar to C. pseudomilitaris in the microscopic characters of non-disarticulating ascospore morphology and its host affinity for lepidopteran larvae, which contrast with the characters of C. militaris. Aspects of morphology, host association, phylogeny and biogeography are discussed.