Fungal skin infections represent the fourth most prevalent disease globally, predominantly attributed to dermatophyte species such as Trichophyton . Nevertheless, sporadic instances of dermatophytosis may also arise from opportunistic, uncommon fungi. This study documents the association of keratinophilic fungi, Myriodontium keratinophilum and Aphanoascus verrucosus , with cases of dermatophytosis in Kashmir, North India. Internal transcribed spacer region sequencing of 64 isolates obtained from skin, hair, and nail samples of 62 patients identified 61% of isolates ( n = 39) as M. keratinophilum , followed by Trichophyton indotineae and A. verrucosus in 20% ( n = 13) and 19% ( n = 12) cases, respectively. Furthermore, the first hybrid de novo genome assembly of M. keratinophilum is reported in the present study. Genomic analysis of both M. keratinophilum and A. verrucosus species revealed median intra-species single nucleotide polymorphism (SNP) differences of 100 and 27, respectively, suggesting highly related strains in the patient population. De novo functional annotation identified a higher number of coding regions in M. keratinophilum compared to T. indotineae and A. verrucosus , including carbohydrate-active enzymes (CAZymes) exhibiting unique substrate affinities and subtilisin 3 ( SUB3 ) gene, previously implicated as a potential virulence gene in dermatophytes. Notably, in addition to all the multidrug transporters encoded by Trichophyton species, M. keratinophilum genome contains six putative ATP-binding cassette (ABC) transporters showing 40%–70% sequence similarity with the CDR1 gene. M. keratinophilum exhibited reduced susceptibility to multiple antifungals, including high minimum inhibitory concentrations (MICs) (>16 mg/L) against griseofulvin and itraconazole. Importantly, itraconazole is a primary therapeutic agent for terbinafine-resistant T. indotineae infections, underscoring the necessity for early and accurate identification and intervention of dermatophytic infections. IMPORTANCE: The study reports cases of dermatophytosis associated with two rare keratinophilic fungi, i.e., Myriodontium keratinophilum and Aphanoascus verrucosus . The cases mainly presented as tinea corporis and cruris, commonly caused by Trichophyton indotineae in the Indian subcontinent, which may remain undiagnosed due to a lack of molecular identification. Furthermore, the first-ever genome report of M. keratinophilum and its ab initio functional annotation is useful for further studies and management of opportunistic pathogens that exhibit reduced susceptibility towards itraconazole, the first-line drug of treatment for terbinafine-resistant T. indotineae infections. An early correct molecular identification of the etiologic agents of skin infections is warranted to tackle the new agents of dermatophytosis at the earliest stage.