Over the past decade, the emergence of anthracnose disease has newly challenged the health of turfgrasses on North American golf courses, resulting in considerable economic loss. The fungus responsible for the outbreaks, Colletotrichum cereale, has also been identified from numerous natural grasses and cereal crops, although disease symptoms are generally absent. Here we utilize phylogenetic and population genetic analyses to determine the role of ecosystem in the advancement of turfgrass anthracnose and assess whether natural grass and/or cereal inhabitants are implicated in the epidemics. Using a four-gene nucleotide data set to diagnose the limits of phylogenetic species and population boundaries, we find that the graminicolous Colletotrichum diverged from a common ancestor into distinct lineages correspondent with host physiology (C3 or C4 photosynthetic pathways). In the C4 lineage, which includes the important cereal pathogens Colletotrichum graminicola, C. sublineolum, C. falcatum, C. eleusines, C. caudatum and several novel species, host specialization predominates, with host-associated lineages corresponding to isolated sibling species. Although the C3 lineage--C. cereale--is comprised of one wide host-range species, it is divided into 10 highly specialized populations corresponding to ecosystem and/or host plant, along with a single generalist population spread across multiple habitat types. Extreme differentiation between the specialized C. cereale populations suggests that asymptomatic nonturfgrass hosts are unlikely reservoirs of infectious disease propagules, but gene flow between the generalist population and the specialized genotypes provides an indirect mechanism for genetic exchange between otherwise isolated populations and ecosystems.