The authors describe and illustrate Entoloma pseudomurryai sp. nov., a new Entoloma with lemon yellow cap, from a mountain Nothofagus forest in New Caledonia. The species is suggested to belong to section Psittacina (Romagn.) Singer of subgenus Inocephalus Noordel., thereby emending the definition to include also species that are not blue. The discussion comments on close species and presents the typical features of this species group.