Hypogymnia minilobata is described as a new species of lichenized fungi from the coast of southern California and the Channel Islands. Previously lumped under H. occidentalis, H. minilobata is distinguished from that species by its small size, consistently appressed growth form, slightly smaller and more elongate spores, and distinct ITS and GPD sequences. So far H. minilobata is known from coastal scrub and woodlands, and is especially common in the Los Osos and Baywood areas of San Luis Obispo County, California.