The traditional order Mischococcales (Xanthophyceae) is polyphyletic with some original members now classified in a separate class, Eustigmatophyceae. However, most mischococcalean species have not yet been studied in detail, raising the possibility that many of them still remain misplaced. We established an algal culture (strain CCALA 838) determined as one such species, Trachydiscus minutus (Bourr.) H. Ettl, and studied the morphology, ultrastructure, life cycle, pigment composition, and phylogeny using the 18S rRNA gene. We discovered a zoosporic part of the life cycle of this alga. Zoospore production was induced by darkness, suppressed by light, and was temperature dependent. The zoospores possessed one flagellum covered with mastigonemes and exhibited a basal swelling, but a stigma was missing. Ultrastructural investigations of vegetative cells revealed plastids lacking both a connection to the nuclear envelope and a girdle lamella. Moreover, we described biogenesis of oil bodies on the ultrastructural level. Photosynthetic pigments of T. minutus included as the major carotenoids violaxanthin and vaucheriaxanthin (ester); we detected no chl c. An 18S rRNA gene-based phylogenetic analysis placed T. minutus in a clade with species of the genus Pseudostaurastrum and with Goniochloris sculpta Geitler, which form a sister branch to initially studied Eustigmatophyceae. In summary, our results are inconsistent with classifying T. minutus as a xanthophycean and indicate that it is a member of a novel deep lineage of the class Eustigmatophyceae.