The first lichen-forming species of Psammina, P. palmata sp. nov., is described from decorticate oak in West Suffolk (UK). It is distinguished from other species by the palmate and 2–3-order branched non-septate conidia flattened in a single plane. The conidia recall those of the lichen-forming hyphomycete genus Cheiromycina in some respects, but do not originate from the swollen subglobose cells characteristic of that genus. The generic concepts in this complex of algicolous, lichen-forming, lichenicolous, and saprobic fungi are discussed, and it is concluded that Pycnopsammina should be treated as a synonym of Psammina as the conidiogenesis resembles that of the type species of Psammina, which also has rather similar conidiomata; the combination Psammina lobariae comb. nov. (syn. Pycnopsammina lobariae) is therefore made. A key to the eight species now accepted in the genus is provided, which now includes algicolous, lichen-forming, lichenicolous, and plant saprobic species.