We examined 53 nests of southern flying squirrels constructed within nest boxes in Mobile County, AL. Of those containing a bedding layer (n = 35), 80% contained fungal rhizomorphs of Marasmius brevipes. Rhizomorphs of this genus have been reported in bird-nest descriptions, but have not been documented in flying squirrel nests. M. brevipes was common on our study site, and its use by flying squirrels may be unique to the area. Nevertheless, this and similar species of rhizomorph-producing fungi occur in other portions of the flying squirrel's range, and the nondescript nature of rhizomorphs may lead to their misidentification. Our observations appear to constitute the first description of an ecological relationship between this fungus and a mammalian species.