Incidence of dry flower disease of macadamia (Macadamia integrifolia), expressed as blight of the flowers and necrosis and dieback of the rachis, is increasing in Australia. In the 2012–13 production season, incidence of dry flower disease resulted in 10 to 30% yield loss in the affected orchards. Etiology of the disease has not been established. This study was established to characterize the disease and identify the causal pathogen. A survey of the major macadamia-producing regions in Australia revealed dry flower disease symptoms regardless of cultivar or location at all stages of raceme development. Based on colony and conidial morphology, the majority (41%) of fungal isolates obtained from tissue samples were identified as Pestalotiopsis and Neopestalotiopsis spp. The phylogeny of the combined partial sequence of the internal transcribed spacer, β-tubulin, and translation elongation factor 1-α gene loci segregated the isolates into two well-supported clades, independent of location or part of the inflorescence affected. Further morphological examination supported the establishment of two new species, which are formally described as Neopestalotiopsis macadamiae sp. nov. and Pestalotiopsis macadamiae sp. nov. Using spore suspensions of isolates of both species, Koch’s postulates were fulfilled on three macadamia cultivars at all stages of raceme development. To our knowledge, this is the first report of species of Neopestalotiopsis and Pestalotiopsis as causal agents of inflorescence disease in macadamia.