DNA sequence data from the nuclear ribosomal internal transcribed spacers (ITS) and the trnL-trnF chloroplast DNA regions were used to quantify geographical partitioning of global biodiversity in peatmosses (Sphagnum), and to compare patterns of molecular diversity with patterns of species richness. Molecular diversity was estimated for boreal, tropical, Neotropical, nonboreal (tropical plus Southern Hemisphere), Old World and New World partitions, based on a total of 436 accessions. Diversity was partitioned among geographical regions in terms of combined nuclear and chloroplast sequence data and separately for the ITS and trnL-trnF data sets. Levels of variation were estimated using phylogenetic diversity (PD), which incorporates branch lengths from a phylogenetic tree, and the number of polymorphic nucleotide sites. Estimates of species richness suggest that peatmoss diversity is higher in New World than Old World regions, and that the Neotropics constitute a ‘hotspot’ of diversity. Molecular estimates, in contrast, indicate that peatmoss biodiversity is almost evenly divided between New and Old World regions, and that the Neotropics account for only 20–35% of global peatmoss diversity. In general, levels of tropical and boreal peatmoss molecular diversity were comparable. Two species, S. sericeum from the Old World tropics and S. lapazense from Bolivia, are remarkably divergent in nucleotide sequences from all other Sphagna and together account for almost 20% of all peatmoss diversity, although they are represented by only three of the 436 accessions (0.7%). These species clearly demonstrate the nonequivalence of species biodiversity value.