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In the early 2000s, experimental rearing of spotted wolffish, Anarhichas minor, was started in Iceland. Health surveillance, carried out at regular intervals during the rearing period, revealed persistent and highly prevalent Kudoa infections of fish muscles which caused great financial losses due to post mortem myoliquefaction. In addition, during the traditional process of drying and smoking wild Atlantic lumpfish, Cyclopterus lumpus, the muscles from some fish almost completely disappear and the fish have to be discarded. To describe the etiological agent responsible for these conditions, spotted wolffish, Atlantic wolffish Anarhichas lupus, northern wolffish Anarhichas denticulatus and Atlantic lumpfish were caught off the Icelandic coast and examined for the presence of Kudoa. We describe a novel myxosporean, Kudoa islandica n. sp., using morphological and molecular data, and show with histopathology that it causes extensive myoliquefaction in three different wild fish hosts, which all are commercially valuable species in Iceland. Although some spore dimensions varied significantly between fish species, the molecular analyses showed that the same parasite was responsible for infection in all fish. The northern wolffish was not found to be infected. Although robustly placed in the Kudoa clade in phylogenetic analyses, K. islandica was phylogenetically distinct from other kudoids. A single myxosporean, K. islandica, is responsible for the infections in the somatic muscles of lumpfish and wolffish, causing extensive post mortem myoliquefaction. This myxosporean is likely to infect other fish species and it is important to study its life cycle in order to evaluate any threat to salmonid culture via the use of lumpfish as a biocontrol for sea lice. [ABSTRACT FROM AUTHOR]