Since the first phylogenetic study of the order Batrachospermales, Batrachospermum was shown to be paraphyletic. Subsequently, sections of the genus have been methodically investigated using DNA sequences and morphology in order to propose new genera and delineate species. Batrachospermum section Turfosa is the last section with multiple species yet to be examined. New sequence data of specimens from Europe and the United States were combined with the sparse sequence data already available. Phylogenetic analyses using rbcL and COI-5P sequences showed this section to be a well-supported clade, distinct from Batrachospermum section Batrachospermum and its segregate genera. SectionTurfosa is raised to the generic rank as Paludicola gen. nov. Substantial genetic variation within the genus was discovered and 12 species are recognized based on DNA sequence data as well as morphological characters and geographic distribution. The following morphological characters were applied to distinguish species: branching pattern (pseudodichotomous or irregular), whorl size (reduced or well developed), primary fascicles (curved or straight), spermatangia origin (primary or secondary fascicles), and carposporophyte arrangement (loose or dense). Previously published species were transferred to the new genus: P.turfosa, P.keratophyta, P.orthosticha, P.phangiae, and P.periploca. Seven new species are proposed as follows: P.groenbladii from Europe; P.communis, P.johnhallii, and P.leafensis from North America; and P.aquanigra, P.diamantinensis, and P.turfosiformis from Brazil. In addition, three unsequenced species in the section, P.bakarensis, P.gombakensis, and P.tapirensis, were transferred to the new genus.