Distinctive basidiomes of Pycnoporus sp. were observed on 5–6-year-old living Paulownia trees at two commercial plantations in Western Australia. The basidiomes were erupting through the bark, which readily peeled away to expose the rotting wood beneath. Based on internal transcribed spacer–polymerase chain reaction, the fungus was identified as Pycnoporus cinnabarinus. Under-bark inoculation of 3-year-old Paulownia fortunei trees in the glasshouse, with mycelium isolated from basidiomes on trees at the commercial plantations, resulted in the formation of dark lesions and the pathogen was re-isolated ahead of the lesion front. Benomyl and cyprodinil were the most effective fungicides at inhibiting the growth of mycelium in vitro. This is the first report of Pyc. cinnabarinus acting as a pathogen on Paulownia trees. It is likely that the pathogen enters living trees through pruning wounds or damage from sun scald. Further work is required to confirm methods of control in the field.