Gondwanan vegetation, and the Australian region in particular, is species rich for ectomycorrhizal fungi in epigeous and hypogeous forms with over 100 species recorded in small (1 ha) patches of forests. Distinguishing co-occurring ectomycorrhizal fungi as root associations in native (natural or wildlands) vegetation or plantations and discriminating them from other larger basidiomycetes, e.g. wood and leaf litter decomposer fungi, places large demands on molecular identification, especially if interspecific similarities and intraspecific variation occur in target sequences. One hundred and nine species of larger basidiomycetes from a single forest location were characterised by PCR–RFLP profiles of two genomic regions (nuclear rDNA ITS and mtLSU). Over one-third of the species for which multiple isolates were tested showed intraspecific variation in either one or both genomic regions. This remarkably high variation questions previous assumptions about intraspecific ITS sequence variation and highlights the value of integrated molecular and morphological databases including voucher specimens. It also emphasises the value of molecular investigations that use more than one genomic region. Interspecific similarities were common among the Cortinariaceae, especially in the ITS region. Discrimination of most Cortinariaceae species was achieved using variation in the mtLSU region in conjunction with the ITS. This new information raises the possibilities that the ITS sequence is more conserved and the mtLSU more variable than among species of the other 23 families. In the other families, interspecific ITS variation was greater and the mtLSU profiles grouped species within families. The high variation in the two genomic regions indicated possible differences in the fungal population structure between two adjacent, differently managed blocks of Eucalyptus marginata forest. The significance of this variation to ecology, biodiversity assessment and ecosystem management are discussed.