Cortinarius is a large genus of fungi containing both mushroom and truffle-like species. Cortinarius sp. KIS3 is not yet formally named and is currently known only from the TL2766 collection. The fungus’ mycelium was observed to form a sock like envelope (mantle) around the roots of the local eucalypts in an ectomycorrhizal relationship. Ectomycorrhizal partners exchange carbon from plant photosynthesis for phosphorus, nitrogen and water. The fungal mycelium is able to reach water and minerals from sites in the soil inaccessible to the much thicker plant root hairs making ectomycorrhizal fungi like KIS3 indispensable for the health of the local Eucalyptus species that are adapted to impoverished lateritic soils. Such symbiotic partnerships have potential as energy crops able to be grown in mineral poor soils. Harvest of the plant lignocellulose could provide feedstock for processes that use fungi to make fuel ethanol. Comparison of the KIS3 genome with closely related truffle-like species will help reveal how mushrooms gave rise to the truffle-like form that is better adapted to dry climates. Mushrooms such as KIS3 disperse their spores in the wind making them vulnerable to desiccation whilst the truffle-like fruiting bodies of underground fruiting relatives are better protected from drying. Ectomycorrhizal relationships which involve truffle-like fungi are dependent on small mammals to dig up and eat the fungus to disperse their spores. Given the projections for climate change, understanding these tripartite symbioses and the genetic pathways to the development of subterranean fruiting may be vital for managing the health of future energy plantations.