Southwest Asia is one of the most important centers of diversity for leafy spurges (Euphorbia subgen. Esula), and Iran is one of the richest countries both for species and endemics in the subgenus. Section Esula, the second largest of the 21 sections of this subgenus, comprises c. 96 taxonomically and phylogenetically poorly understood species with complicated patterns of morphological variation. The Euphorbia osyridea alliance is an Iranian-centered group harboring the well-known endemic and semi-endemic species, E. buhsei, E. osyridea, and two poorly understood and yet undescribed taxa. In a phylogenetic framework based on nuclear ribosomal ITS (internal transcribed spacer) and plastid ndhF sequences, inter-simple sequence repeat (ISSR) polymorphisms were used to investigate genetic structure and genetic diversity in seven populations of the endemic and semi-endemic species of E. osyridea alliance. Phenetic analysis (principal component analysis) was used to assess morphological differentiation of the alliance. Neither nuclear nor plastid sequences provided sufficient resolution to disentangle the diversification patterns within the E. osyridea alliance. The combined evaluation of phylogenetic study, ISSR analysis, and morphological data confirmed that studied populations of E. osyridea alliance can be divided into four different groups including two new endemic species, E. khabrica sp. nov. and E. austro-iranica sp. nov. Typification, description, data on distribution and habitats, key to species as well as pertinent comments are given.