Observations on the developmental morphology of Arbuscula eugeniae Batista and Peres (the type species of the genus) are given. The fungus produces largely pseudoparenchymatous bulbils generated by and surrounding a core of hyphae whose continued extension and activity result in the successive acropetal production of columnar branching chains of bulbils. The genus Arbuscula is therefore classified in the Mycelia Sterilia.