During the last two decades, the unprecedented development of molecular phylogenetic tools has propelled an opportunity to revisit the fungal kingdom under an evolutionary perspective. Mycology has been profoundly changed but a sustained effort to elucidate large sections of the astonishing fungal diversity is still needed. Here we fill this gap in the case of Lyophyllaceae, a species-rich and ecologically diversified family of mushrooms. Assembly and genealogical concordance multigene phylogenetic analysis of a large dataset that includes original, vouchered material from expert field mycologists reveal the phylogenetic topology of the family, from higher (generic) to lower (species) levels. A comparative analysis of the most widely used phylogenetic markers in Fungi indicates that the nuc rDNA region encompassing the internal transcribed spacers 1 and 2, along with the 5.8S rDNA (ITS) and portions of the genes for RNA polymerase II second largest subunit (RPB2) is the most performing combination to resolve the broadest range of taxa within Lyophyllaceae. Eleven distinct evolutionary lineages are identified, that display partial overlap with traditional genera as well as with the phylogenetic framework previously proposed for the family. Eighty phylogenetic species are delineated, which shed light on a large number of morphological concepts, including rare and poorly documented ones. Probing these novel phylogenetic species to the barcoding method of species limit delineation, indicates that the latter method fully resolves Lyophyllaceae species, except in one clade. This case study provides the first comprehensive phylogenetic overview of Lyophyllaceae, a necessary step towards a taxonomical, ecological and nomenclatural revision of this family of mushrooms. It also proposes a set of methodological guidelines that may be of relevance for future taxonomic works in other groups of Fungi.