Xerula megalospora is a species of gilled mushroom in the family Physalacriaceae. Xerula megalospora fruit bodies occur on the ground, solitarily or in small groups. They are saprobic and found near the well-decayed stumps of oak or other broadleaf trees. This species can grow up to 13 cm (5.1 in) high. The caps, 2–10 cm (0.8–3.9 in) across, can be a convex or umbonate shape eventually becoming flat and centrally depressed. The cap is viscid and colored smokey white to pale buff. Gills are adnate, white, and smooth. The flesh of Xerula megalospora is white, and the odor is sometimes described as being reminiscent of carrots. The stipe contains a root-like extension 8–12 cm (3.1–4.7 in) long. The spore print is white. The spores of this species are a distinguishing feature being a relativel