Gymnopilus chrysopellus is a wood-decaying fungus in the family Cortinariaceae. To date, whole-genome data are not available for any of the wood-decaying species in this family. Although some wood-decaying fungi in the Cortinariacea are capable of being the primary agent of decay, other species, such as Gymnopilus chrysopellus, are known for their ability to decay wood that is already in late stages of decomposition. By sequencing the genome of Gymnopilus chrysopellus, we hope to identify gene families and molecular mechanisms that will be useful for fully converting many types of biomass, including those with high levels of recalcitrant substrates such as lignin, into bioenergy. The molecular mechanisms used by late-stage decay fungi may also be useful when used in combination with early-stage decay fungi, thus allowing for more efficient extraction of bioenergy. In addition, some members of the Cortinariaceae are well-known for their ability to form beneficial relationships with tree roots, thus helping plants to sequester carbon from the atmosphere and produce biomass that can potentially be used for bioenergy production. By sequencing the genome of a wood-decay fungus from this family, it will be possible to examine the molecular mechanisms involved in the “evolutionary switching” from a beneficial root-associated fungus to a biomass degrading fungus.