Yellow Tree Fungus
Yellow fungus can appear on your tree in various shapes and sizes. Fungi are the most common tree pathogens, according to North Dakota State University. Since fungi has no chlorophyll of its own, it feeds on trees and other green plants.
While most fungi are invisible to the naked eye, wood-rotting fungi are often large and colourful.
One common fungi that grows on decaying trees is the honeycomb bracket fungus (Favolus alveolaris). Ranging from a reddish yellow to orange in colour, the honeycomb bracket fungus is easy to recognise for its large cap and the hexagonal pores on its underside.
Chicken of the Woods
An edible mushroom that grows on trees is the Laetiporus sulphureus mushroom, also known as the Chicken of the Woods. Limited to the eastern portion of North America, the Chicken of the Woods mushroom ranges in colour from yellow to orange.
Another type of yellow fungus that grows on trees is the Heterotextus alpinus, or yellow jelly fungus. Found growing in clusters on conifers on the West Coast, the jelly fungus might look soft to the touch, but is actually hard.