Ectomycorrhiza and basidiomes of Hydnangium sublamellatum sp. nov. were produced in pot cultures of Eucalyptus diversicolor and E. globulus seedlings which had been raised aseptically and inoculated with pure cultures of the fungus. Ectomycorrhiza from these pot cultures are described. Basidiomes from the pot cultures and from the field are also described, with particular emphasis on variation in basidiome macromorphology. Basidiome variation of Hydnangium carneum and Laccaria fraterna from similar field sites and pot cultures is compared with that of H. sublamellatum. A large diversity in mature basidiome morphology, due to different developmental patterns, was observed amongst and within the different pot culture and field collections of H. sublamellatum, ranging from completely enclosed (angiocarpous) sublamellate to agaricoid (hemiangiocarpous) lamellate forms. The diversity shown by H. sublamellatum impinges upon morphologically based generic concepts of Hydnangium (hypogeous or subepigeous, angiocarpous, truffle-like), Podohydnangium (subepigeous, hemiangiocarpous) and Laccaria (epigeous, hemiangiocarpous, agaricoid). Agaricoid basidiomes of H. sublamellatum approach the macromorphology of Laccaria species, as both have a lamellate hymenium and hemiangiocarpous (hypovelangiocarpous) development, but H. sublamellatum is distinguished by not forcibly discharging its spores. An intermediate taxonomic position between Hydnangium and Podohydnangium is suggested for H. sublamellatum, and we caution the present distinction between those two genera. The radially arranged, sublamellate/lamellate hymenium of H. sublamellatum is more similar to that of Podohydnangium (partially exposed with some radial arrangement), than to the usually loculate hymenium of Hydnangium. However, we place H. sublamellatum in Hydnangium on the basis of its stipe morphology (fragile attachment and small size), and observation of variations in H. carneum including some basidiomes having well-developed, emergent stipes. H. sublamellatum differs from H. carneum in developmental and mature macromorphology of basidiomes, spore size and form, and number of sterigmata on basidia. In addition to H. sublamellatum, substantial intraspecific variations in basidiome macromorphology were also observed with H. carneum and L. fraterna. For all three species, variations were not likely to be environmentally induced, as they were often expressed within a single collection of basidiomes, and in all flushes of basidiomes throughout the season. The implications of broad, mature basidiome phenotype plasticity within species are discussed for some generic concepts in the Agaricales where fungi with extremely similar micromorphology but with different mature basidiome structure are currently designated as representing separate genera. In particular, our investigation supports the hypothesis that there is a continuum of stipe, hymenium and pileus morphologies which transgresses the formal taxonomic boundaries of Hydnangium, Podohydnangium and Laccaria.