The species is readily recognized due to its distinctive coral-like form–its thallus grows as a tangle of orange, filamentous branches.

It had been suspected, even before the advent of molecular phylogenetics, that this group was not monophyletic, implying that these species have evolved separately from different ancestors within the genus.

[4] The presence of a microfruticose species in a predominantly crustose genus is unusual, and has led to historical disagreement as to its proper classification.

In 2001, Irwin Brodo suggested that the fruticose growth form of the lichen hinted at a possible relationship to Teloschistes, but further pointed out that the North American representatives of this genus were either corticolous or terricolous, and more abundantly branched.

Phylogenetically, Polycauliona coralloides and Caloplaca thamnodes share similarities in thallus anatomy, spore type, overall morphology, and ecology, suggesting a close relationship.

[5] Polycauliona coralloides is a dwarf-fruticose lichen that forms dense to loose cushions up to 2 cm (13⁄16 in) in diameter and 8 mm (5⁄16 in) in height.

Austroplaca erecta is distinguished by its less prominent pseudocyphellae, differing lobe anatomy, wider ascospores with longer septa, and larger conidia.

[9] Polycauliona coralloides is a strictly littoral species, found close to the seashore, predominantly on hard rocks and mainly on vertical surfaces.