A molecular phylogeny was reconstructed from a culture collection of >150 isolates of epi-endophytic and endophytic green algae, based on nucleotide sequences of the plastid tufA and nuclear ITS2 loci. The cultures were isolated from a variety of algal hosts, notably the red algae Chondrus crispus, Mastocarpus stellatus, and Osmundea species, and the brown algae Chorda filum and Fucus serratus. The phylogeny revealed that in the Ulvales the majority of isolates fell into Acrochaete (Ulvellaceae), Ulva (Ulvaceae), Bolbocoleon (Bolbocoleaceae), and at least two unknown genera provisionally assigned to the Kornmanniaceae. Acrochaete was monophyletic. The genus was also more specious than previously described with 12 species, including up to six new species awaiting formal description. Isolates identified as Acrochaete repens, the type species of the genus, were polyphyletic. The remainder of the isolates were placed in the Ulotrichales. The results confirm that the endophytic habit supports a broad diversity of algal taxa and suggest that blade formation is a relatively recent innovation within the green algae.