Moderately to well-preserved palynomorph assemblages were recorded from thirty samples of the Nukhul Formation (GH 404-2A Well), southern Gulf of Suez, Egypt. The taxa are dominated by highly diverse fungi, freshwater algae (e.g. Botryococcus, Pediastrum) beside a sparse record of spores and pollen. Marine palynomorphs, such as dinoflagellate cysts (dinocysts), are very rare. The stratigraphy and age of the Nukhul Formation is highly debated due to lack of diagnostic fossils (e.g. foraminifera, nannoplankton). It has been referred mostly to the Early Miocene; however, some recent publications interpret it as being of latest Oligocene–Early Miocene age. A prominent fungal proliferation composed of diverse and moderately well-preserved fungal spores, fungal fragments, fructifications and hyphae is recorded. This fungi-rich interval occurs mainly from 11370 to 11430 ft in the GH 404-2A Well. Such an observation has not been noted previously within the Nukhul Formation or its stratigraphic equivalents in Egypt. This putative ‘eco-event’ is probably associated with the well-known eustatic sea-level fall in the latest Chattian to early Aquitanian or at the Oligocene/Miocene boundary (OMB). It also seems possible that it may represent a more local event related to the rifting of the Gulf of Suez during this period. The high diversity of fossil fungi is interpreted herein as an indication of an episodic prevalence of humid climate at the end of a regressive phase, as also indicated by a lithological change near the top of the Shoab Ali Member of the Nukhul Formation. In addition, the co-occurrence of freshwater algae, mainly Botryococcus and Pediastrum, together with some aquatic fungal genera, such as Involutisporonites, Paragrantisporites, Quilonia, Striadiporites and Reduviasporonites, suggests the temporary existence of shallow, pond- or lake-like aquatic habitats, possibly related to tectonic activity.