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Abstract Species are the currency of biology and important units of biodiversity, thus errors in species delimitations potentially have important consequences. During the last decades, owing to the use of genetic markers, many nominal species appeared to consist of several reproductively isolated entities called cryptic species (hereafter CS). In this chapter we explain why CS are important for practical reasons related to community and ecosystem monitoring, and for biological knowledge, particularly for understanding ecological and evolutionary processes. To find solutions to practical problems and to correct biological errors, a thorough analysis of the distinct types of CS reported in the literature is necessary and some general rules have to be identified. Here we explain how to identify CS, and we propose a rational and practical classification of CS (and putative CS), based on the crossing of distinct levels of genetic isolation with distinct levels of morphological differentiation. We also explain how to identify likely explanations for a given CS (either inherent to taxonomic processes or related to taxon biology, ecology and geography) and how to build a comprehensive database aimed at answering these practical and theoretical questions. Our pilot review of the literature in marine animals established that half of the reported cases are not CS sensu stricto (i.e. where morphology cannot distinguish the entities) and just need taxonomic revision. It also revealed significant associations between CS features, such as a higher proportion of diagnostic morphological differences in sympatric than in allopatric CS and more frequent ecological differentiation between sympatric than allopatric CS, both observations supporting the competitive exclusion theory, thus suggesting that ignoring CS causes not only species diversity but also functional diversity underestimation.