A six-year-old female entire German shepherd dog was investigated for polyuria, polydipsia and lethargy. Investigations revealed a mild azotaemia and abdominal ultrasound revealed marked bilateral dilation of the renal pelves with echogenic material and proximal left hydroureter. Urine cytological examination and aspirates from the right renal pelvis revealed mats of fungal hyphae consistent with fungal bezoar formation. Fungal cultures revealed a profuse growth of Paecilomyces variotii. Initial treatment with oral itraconazole was unsuccessful, leading to bilateral nephrotomies to remove the fungal material. Postoperatively the Paecilomyces infection persisted despite continued itraconazole therapy. Treatment was commenced with amphotericin B, leading to resolution of the dog's clinical signs. To the authors’ knowledge this is the first report of canine Paecilomyces pyelonephritis, without disseminated systemic disease, which documents its successful treatment.