Subfamily Paepalanthoideae encompass the largest generic diversity in Eriocaulaceae. In the present study, the main goals were to infer the phylogeny of this subfamily focusing on Paepalanthus, to evaluate recent classifications and morphological characters in a phylogenetic context and to reconstruct the historical biogeography of the group. Sampling involved 94 ingroup species corresponding to all recognized genera and three outgroup species. Two molecular data sets, nuclear ribosomal internal transcribed spacer (nrITS) and plastid trnL-trnF, were analysed under parsimony and Bayesian methods. Rondonanthus is monophyletic and confirmed as sister to the remaining Paepalanthoideae. Leiothrix and Actinocephalus are each monophyletic, whereas Syngonanthus may be either monophyletic or paraphyletic with the recognition of Philodice. Four subgenera of Paepalanthus are monophyletic, but P. subgenus Paepalanthus is polyphyletic. Morphological characters used in previous classifications are assessed as putative synapomorphies for recognized genera. Some of the characters employed in defining Paepalanthus subcategories appear to have evolved multiple times, and many clades may be exclusively defined by molecular synapomorphies. Biogeographical reconstructions suggest that the current distribution patterns may be related to vicariance and a few long-distance dispersal events. Furthermore, some clades are restricted to narrow geographical areas, perhaps important as a means of conserving evolutionary processes. © 2012 The Linnean Society of London, Botanical Journal of the Linnean Society, 2012, ●●, ●●–●●.