Panellus, sensu lato has included putatively related taxa with uncertain affinities. Previous researchers suggested that Dictyopanus, a poroid mushroom, was closely related to the gilled Panellus, but affinities of Dictyopanus and Panellus to segregate genera of Tectella, Pleurotopsis and Sarcomyxa remained uncertain. Representative specimens and isolates of eight species of Panellus s.l. and Dictyopanus were examined; P. stypticus, P. mitis, P. ringens, P. violaceofulvus, P. serotinus, P. patellaris, P. longinquus and Dictyopanus pusillus. Phylogenies based on morphology and ribosomal large subunit DNA sequences were constructed. Both methods supported five clades: 1) D. pusillus and P. stypticus; 2) P. ringens and P. violaceofulvus; 3) P. mitis; 4) P. serotinus: and 5) P. patellaris. Inclusion of sequences for Resinomycena acadiensis, Mycena rutilanthiformis and M. clavicularis showed that Panellus s.l. was polyphyletic. Generic designations exist for all clades or terminal taxa except for Panellus mitis which may require new generic placement. Both P. stypticus and D. pusillus share a homologous Group I Intron at the same position of the ribosomal large subunit gene, further supporting a close relationship between Dictyopanus and Panellus.