Cryptic species are a common phenomenon in cosmopolitan marine species. The use of molecular tools has often uncovered cryptic species occupying a fraction of the geographic range of the original morphospecies. Shipworms (Teredinidae) are marine bivalves, living in drift and fixed wood, many of which have a conserved morphology across cosmopolitan distributions. Herein novel and GenBank mitochondrial (cytochrome c oxidase subunit I) and nuclear (18S rRNA) DNA sequences are employed to produce a phylogeny of the Teredinidae and delimit a cryptic species pair in the Psiloteredo megotara complex. The anatomy, biogeography, and ecology of P. megotara, Psiloteredo sp. and Nototeredo edax are compared based on private and historic museum collections and a thorough literature review. Morphological and anatomical characters of P. megotara from the North Atlantic and Psiloteredo sp. from Japan were morphologically indistinguishable, and differ in pallet architecture and soft tissue anatomy from N. edax. The two Psiloteredo species were then delimited as genetically distinct species using four molecular-based methods. Consequently, the Northwest Pacific species, Psiloteredo pentagonalis, first synonymized with N. edax and then with P. megotara, is resurrected. Nototeredo edax, P. megotara and P. pentagonalis are redescribed based upon morphological and molecular characters. Phylogenetic analysis further revealed cryptic species complexes within the cosmopolitan species Bankia carinata and possibly additional cryptic lineages within the cosmopolitan Lyrodus pedicellatus.