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Beauveria is a globally distributed genus of soil-borne entomopathogenic hyphomycetes of interest as a model system for the study of entomopathogenesis and the biological control of pest insects. Species recognition in Beauveria is difficult due to a lack of taxonomically informative morphology. This has impeded assessment of species diversity in this genus and investigation of their natural history. A gene-genealogical approach was used to investigate molecular phylogenetic diversity of Beauveria and several presumptively related Cordyceps species. Analyses were based on nuclear ribosomal internal transcribed spacer (ITS) and elongation factor 1-alpha (EF1-alpha) sequences for 86 exemplar isolates from diverse geographic origins, habitats and insect hosts. Phylogenetic trees were inferred using maximum parsimony and Bayesian likelihood methods. Six well supported clades within Beauveria, provisionally designated A-F, were resolved in the EF1-alpha and combined gene phylogenies. Beauveria bassiana, a ubiquitous species that is characterized morphologically by globose to subglobose conidia, was determined to be non-monophyletic and consists of two unrelated lineages, clades A and C. Clade A is globally distributed and includes the Asian teleomorph Cordyceps staphylinidaecola and its probable synonym C. bassiana. All isolates contained in Clade C are anamorphic and originate from Europe and North America. Clade B includes isolates of B. brongniartii, a Eurasian species complex characterized by ellipsoidal conidia. Clade D includes B. caledonica and B. vermiconia, which produce cylindrical and comma-shaped conidia, respectively. Clade E, from Asia, includes Beauveria anamorphs and a Cordyceps teleomorph that both produce ellipsoidal conidia. Clade F, the basal branch in the Beauveria phylogeny includes the South American species B. amorpha, which produces cylindrical conidia. Lineage diversity detected within clades A, B and C suggests that prevailing morphological species concepts underestimate species diversity within these groups. Continental endemism of lineages in B. bassiana s.l. (clades A and C) indicates that isolation by distance has been an important factor in the evolutionary diversification of these clades. Permutation tests indicate that host association is essentially random in both B. bassiana s.l. clades A and C, supporting past assumptions that this species is not host specific. In contrast, isolates in clades B and D occurred primarily on coleopteran hosts, although sampling in these clades was insufficient to assess host affliation at lower taxonomic ranks. The phylogenetic placement of Cordyceps staphylinidaecola/bassiana, and C. scarabaeicola within Beauveria corroborates prior reports of these anamorph-teleomorph connections. These results establish a phylogenetic framework for further taxonomic, phylogenetic and comparative biological investigations of Beauveria and their corresponding Cordyceps teleomorphs.