White feces syndrome (WFS) has recently been reported as a serious problem for shrimp aquaculture in major shrimp farming nations. WFS affected shrimp show white/golden brown intestine, reduced feed intake, stunted growth and is often associated with loose shell, while WFS affected pond show masses of floating white feces on the surface of the pond. Accumulation of aggregated transformed microvilli (ATM) structures in hepatopancreas (HP) lumen that superficially resemble gregarine are reported to cause WFS. But the causal association of ATM and WFS is unknown. Also, WFS occurrences are significantly associated with incidences of the emerging microsporidian Enterocytozoon hepatopenaei (EHP) in the Penaeus vannamei grow-out system. The present study unveiled the occurrences of EHP spores along with ATM structures in the WFS affected shrimps. The histology section stained with calcofluor white stain (CFW) and semithin section revealed the presence of EHP spores in and around the transformed microvilli. Further, EHP spores were detected in all the individual WFS affected shrimps and white fecal threads by light microscopy and SWP-PCR. All WFS samples tested negative for WSSV, IHHNV, IMNV, and AHPND. None of the Vibrio isolates were found predominant in WFS affected shrimps. In bioassay studies, by feeding with WFS affected HP tissue, white fecal threads were successfully reproduced along with ATM structures and EHP spores. However, purified EHP spores (106 ml−1) failed to elicit WFS in challenged animals. In the clinical experiment, when WFS affected shrimp were reared under optimal laboratory settings, white feces were found to resolve, and the animals excreted normal feces in about 7–10 days, without any interventions. Further, histological studies showed the epithelial cells (E cells or embryonic cells) regeneration ability in WFS resolved shrimp. However, the WFS recovery observed was not a complete recovery since the resolved shrimps continue to shed EHP spores in normal feces. It is observed that EHP is the major pathogen excreted/disseminated via white feces in shrimp. With this study, we postulate that WFS is a clinical condition/shrimp diarrhea associated with severe EHP infection that may be caused by EHP in combination with an unknown agent.