Montagnea arenaria [Hymenogastrales, Basidiomycota] , adapted to desert and xeric habitats, is morphologically and phenotypically variable. Species have been described on the basis of macromorphology and spore shape and size. This study was initiated to investigate populations of M. arenaria from Namibia in Africa and the Southwestern United States. It was hypothesized that biological species would exist in the widely separated populations. Spores from single sporocarps were germinated, single spore isolates were obtained and selfed to obtain mating types. On transfer, clamp connections were not maintained and mating patterns could not be achieved. Nuclear staining revealed multinuclei in the hyphae of both single spore isolates and compatible crosses. Spores were stained and found to have either 1 or 2 nuclei, but only four sterigmate basidia were observed. Limited partial compatibility was achieved and in some cases clamp connections formed within and between crosses from the two continents. Genomic DNA was extracted from old herbarium specimens. The ITS1, 5.8S, and ITS4 regions of nuclear ribosomal DNA were amplified and sequenced directly. Phylogenetic analysis using PAUP was performed. The hypothesis that Montagnea would form different biological species based on continental separation was rejected. In fact, the complex of isolates from widely varying locations not only had partial compatibility, but the variation in ITS sequences among widely distributed collections was relatively low. Lastly, no correlation between sporocarp size and gene flow among specimens from a wide variety of habitats was found. It appears that M. arenaria is a single, highly variable, widely distributed species.