We investigated the systematic relationships within the pleurocarpous moss genus Plagiothecium, based on cladistic analyses of sequence data from one nuclear (ITS) and two plastid (trnK-psbA (matK) and rpl16 intron) DNA regions for 110 specimens of Plagiothecium and similar hypnalean mosses. Plastid and nuclear trees were mostly similar, but differed in the placement of several species of Plagiothecium, and in the relationships among other genera. The phylogenetic hypotheses based on plastid markers were well resolved; in contrast, nuclear data were insufficient to resolve some of the lowest-level relationships within the genus. In the main Plagiothecium is natural, includes more taxa than are often recognized, and is most closely related to Isopterygiopsis and Herzogiella. Nine sections are recognized within Plagiothecium, four new: Section Pseudo-Neckera to accommodate P. neckeroideum and its allies, Section Ortholimnobium for P. handelii and P. paleaceum, Section Struckia for P. argentatum and P. enerve, and Section Rectithecium for P. piliferum. The geographical distribution of the sections suggests that Plagiothecium originated in Asia. The derived, mainly autoicous sections Plagiothecium and Leptophyllum may have spread to the Southern Hemisphere through long distance dispersal. Three new species in section Leptophyllum (P. funale, P. pacificum and P. rhizolucidum) and two new taxa in section Pseudo-Neckera (P. decoratum and P. neckeroideum fo. exile) are described. A limited phylogenetic hypothesis for the superficially similar hypnalean genus Taxiphyllum, which was used as outgroup, is included. A related genus (Longiella) is described, with a single species (L. plagiothecioides). The aquarium species T. barbieri is transferred to Ectropothecium.