Macadamia is an evergreen tree grown for its edible kernel in tropical and subtropical regions worldwide. The macadamia nursery industry is facing major challenges due to Phomopsis graft dieback. However, the pathogen responsible for causing Phomopsis graft dieback is unknown, nor is it known whether the primary source of infection is from scion wood after grafting. The source of the scion is different among nurseries. To identify the pathogen responsible for the disease, we surveyed the five major commercial macadamia nurseries in Australia. We identified six Diaporthe spp. from nursery plants with symptoms, and four species from asymptomatic plants. Scion wood produced 61% of Diaporthe spp. as compared to rootstock (39%). Diaporthe australiana was the most dominant species, followed by D. fraxini-angustifoliae, D. masirevicii, D. musigena, D. middletonii and D. litchicola. However, in the pathogenicity assays, D. litchicola was the most aggressive and caused a significantly higher percentage of Phomopsis graft dieback than D. australiana, whereas other species produced insignificant lesions. Scion wood inoculation resulted in a higher percentage of Phomopsis graft dieback than rootstock inoculation. Our findings suggest that two Diaporthe species cause Phomopsis graft dieback in macadamia nurseries.