Most fungal viruses have been identified in plant pathogens, whereas the presence of viral particles in human-pathogenic fungi is less well studied. In the present study, we observed extrachromosomal double-stranded RNA (dsRNA) segments in various clinical isolates of Malassezia species. Malassezia is the most dominant fungal genus on the human skin surface, and species in this group are considered etiological factors of various skin diseases including dandruff, seborrheic dermatitis, and atopic dermatitis. We identified novel dsRNA segments, and our sequencing results revealed that the virus, named MrV40, belongs to the Totiviridae family and contains an additional satellite dsRNA segment encoding a novel protein. The transcriptome of virus-infected Malassezia restricta cells was compared to that of virus-cured cells, and the results showed that transcripts involved in ribosomal biosynthesis were downregulated and those involved in energy production and programmed cell death were upregulated. Moreover, transmission electron microscopy revealed significantly larger vacuoles in virus-infected M. restricta cells, indicating that MrV40 infection dramatically altered M. restricta physiology. Our analysis also revealed that viral nucleic acid from MrV40 induced a TLR3 (Toll-like receptor 3)-mediated inflammatory immune response in bone marrow-derived dendritic cells, suggesting that a viral element contributes to the pathogenicity of MalasseziaIMPORTANCEMalassezia is the most dominant fungal genus on the human skin surface and is associated with various skin diseases including dandruff and seborrheic dermatitis. Among Malassezia species, Malassezia restricta is the most widely observed species on the human skin. In the current study, we identified a novel dsRNA virus, named MrV40, in M. restricta and characterized the sequence and structure of the viral genome along with an independent satellite dsRNA viral segment. Moreover, expression of genes involved in ribosomal synthesis and programmed cell death was altered, indicating that virus infection affected the physiology of the fungal host cells. Our data also showed that the viral nucleic acid from MrV40 induces a TLR3-mediated inflammatory immune response in bone marrow-derived dendritic cells, indicating that a viral element likely contributes to the pathogenicity of Malassezia This is the first study to identify and characterize a novel mycovirus in Malassezia.