The illudins are a family of fungal sesquiterpenes that have been studied as anti-tumor agents, and they also have antibacterial activity. Over a four-year period, 25304 fungal isolates (approximately 97% ascomycetes and 3% basidiomycetes), were screened for antibacterial activity against methicillin-resistant Staphylococcus aureus. Illudin-like compounds with antibacterial and cytotoxic activity against tumor cell lines were observed in 10 basidiomycete strains. The isolates were recovered from different types of substrata using indirect methods and only formed sterile mycelia in pure culture. The isolates were genetically related but not identical, based on PCR-based fingerprinting techniques. DNA sequencing of the ITS1-5.8 S-ITS2 region of the strains revealed that nine had identical sequences, indicating that they were conspecific. The sequence of the remaining isolate was 96.34% similar, suggesting that it was a closely related species. The D1–D2 region of the 25 S rRNA gene of the two strain types was also sequenced. Both sequences were 99.39% similar, and Coprinopsis gonophylla (syn. Coprinus gonophyllus) was the closest match for both. Strains were grown in pure culture on a rice-based medium that allowed the development of basidiomata from one culture of the main strain type, which was identified as C. episcopalis, a close relative of C. gonophyllus. Both species (or strain types) produced different types of illudin-like compounds. Three novel illudins (I, I2 and J2) were found to be produced by the cultures identified as C. episcopalis, while only illudinic acid was produced by the other Coprinopsis sp. The taxonomical relationships of the Coprinopsis species identified in this study with other illudin producers previously reported in the literature are discussed.