Cladonia lacryma sp. nov., a previously overlooked species from north coastal California and adjacent Oregon, is characterized by the teardrop-like shape of its podetium. The unusual shape develops when the indistinct, immature cup is deformed by the vertical growth of a single proliferation along its margin. Cladonia lacryma is similar to other species in section Cladonia, which are characterized by closed cups and the presence of fumarprotocetraric acid. The pattern of growth dynamics of C. lacryma suggests its affinity with C. prolifica, which grows on similar soil types in California.