Xerula australis is a species of gilled mushroom in the family Physalacriaceae that is found in Australia.

The gills have an adnate attachment to the stipe, are whitish in color, changing to buff in maturity, sometimes with a tinge of pink in older specimens.

[4] Like other Xerula species, X. australis has a characteristic root-like rhizomorph that extends down in the soil, usually attached to rotting wood under the fruitbody.

[5] Xerula australis has been recorded growing singly or in groups on sandy soil in Southern Australia.

[4] Smith (2005) notes that in the Bunya Mountains of south-east Queensland, the fungus may be found fruiting in large groups on dead roots in the rainforest, but it is also associated with eucalypt forests and woodland.