During a recent collection trip to Barro Colorado Island, Panama, two species belonging to genus Ascopolyporus (Clavicipitaceae, Hypocreales) were collected. Species of Ascopolyporus are epibionts of their bamboo (Poaceae) host and long thought to be biotrophs of their plant hosts. However, based on morphological observations and phylogenetic evidence using large subunit ribosomal DNA data, we propose that genus Ascopolyporus is likely composed of pathogens of scale insects (Coccoideae, Homoptera). Phylogenetic analyses included Ascopolyporus spp. in a clade containing only entomopathogenic clavicipitaceous species (100% posterior probability), and the scale insect pathogen Hyperdermium bertonii was found to share the most recent common ancestor with the Ascopolyporus clade (98% posterior probability). In addition remnants of the scale insect were observed to be embedded within stromata during early stages of stroma development. Ascopolyporus philodendrus sp. nov. was described and distinguished from the type species of the genus, A. polychrous, based on perithecial size, ascus size, plant host substrate and phylogenetic evidence. Furthermore subfamily Clavicipitoideae (Clavicipitaceae) was included and well supported in a single clade (100% posterior probability).