Verticillium fungicola, the type species of Verticillium sect. Albo-erecta, and related taxa were studied using morphological and molecular techniques. Sequences of the ITS region and SSU rDNA suggest that V. fungicola is very close to members of the genus Lecanicillium and unrelated to other species that were originally accommodated in the same section. New combinations in Lecanicillium are proposed for Verticillium fungicola and its var. flavidum at species rank, L. f. var. aleophilum is retained as a variety. These taxa can be distinguished from each other by optimum and maximum temperatures for growth, in addition to ITS sequence differences. Morphologically, L. flavidum is also distinct by repeated branching of the conidiophores, whereas the two varieties of L. fungicola have a simple conidiophore axis.