Paecilomyces niveus is an important food spoilage fungus that survives thermal processing in fruit products, where it produces the mycotoxin patulin. Spoilage of products has been attributed to soil contamination; however, little is known about the ecology of this organism. In this study, orchard soils and culled apple fruit were surveyed and the ability of P. niveus to infect apple was tested on two popular apple varieties. P. niveus was found in 34% of sampled orchard soils from across New York. Completing Koch’s postulates, P. niveus was demonstrated to cause postharvest disease in Gala and Golden Delicious apple. Symptoms of this disease, named Paecilomyces rot, resemble several other apple diseases, including black rot, bitter rot, and bull’s-eye rot. External symptoms of Paecilomyces rot include brown, circular, concentrically ringed lesions, with an internal rot that is firm and cone-shaped. Both Gala and Golden Delicious apple fruit inoculated with P. niveus developed lesions ≥43 mm in size at 22 days after inoculation. There is some evidence that the size of lesions and rate of infection differ between Gala and Golden Delicious, which may indicate differing resistance to P. niveus. This work shows that P. niveus is common in New York orchard soil and can cause a novel postharvest fruit disease. Whether infected fruit can serve as an overlooked source of inoculum in heat-processed apple products requires further study.