AbstractWood‐inhabiting fungal communities are a diverse and ecologically critical part of forest ecosystems, yet the spatial structure of fungal biodiversity in these ecosystems is largely unknown. Legislation allowed harvesting of deadwood from temperate rainforests on conservation lands in New Zealand following Cyclone Ita in 2014. Harvesting guidelines specified widely spread harvesting, on the assumption that rare fungal species may be highly spatially restricted, but were not based on quantitative assessment. We sampled fungi in and on logs of Dacrydium cupressinum (Podocarpaceae) a long‐lived, common, canopy tree in lowland New Zealand forests. DNA was extracted from 81 logs varying in decay state across a 40 km long region of West Coast (South Island) forests, and sequenced using general fungal primers for metabarcoding to identify OTUs (operational taxonomic units). We examined three axes of rarity: occupancy, dominance when present, and niche breadth (as spatial extent and decay state specialization). Low‐occupancy fungi were common, including a group of infrequently occurring but dominant when present fungi, the majority of which were Ascomycota. Despite this, there was an overall positive relationship between occupancy and dominance. Widespread, dominant fungi were most commonly Basidiomycota. Testing all fungal OTUs, there were no more fungi with maximum range sizes < 4 km than would be expected at random. Of the 351 low‐occupancy OTUs found two to four times, only 12 had maximum range sizes < 900 m, and there was no more spatial restriction at scales < 900 m than would be expected by random chance, although there was some evidence of niche breadth restriction based on decay state similarity. The results show that fungal communities in deadwood are highly diverse, and include many rare taxa. Nonetheless, the lack of fungal OTUs with spatial restriction at scales < 900 m suggests that spatially dispersed timber harvesting will not mitigate risks of harvesting to rare fungal biodiversity.