The genus is a special and crucial taxonomic rank compared with others above the species level, because a species has to be placed in a certain genus instead of any other higher ranks. With more and more new species being described, the placements of their generic position are sometimes incorrect due to the simple phylogenies resulting from inappropriate sampling. Here, we focus on the taxonomy of a small wood-inhabiting fungal genusHyphodermella. With the most comprehensive sampling to date, the phylogenetic position ofHyphodermellawithinPhanerochaetaceaeis rearranged by employing the same ITS and nLSU regions as in previous studies and also the ITS, nLSU,rpb1,rpb2andtef1αregions. Three species are excluded fromHyphodermella:H. poroidesis placed in a newly introduced monotypic genusPseudohyphodermella, whileH. aurantiacaandH. zixishanensisare transferred toRoseograndinia.Hyphodermella suiaeis described as a new species from South China and Vietnam. Keys to eight species inHyphodermellaand five inRoseograndiniaare provided. Beyond solving the taxonomic issue ofHyphodermellaitself, the current study also aims to suggest that all fungal taxonomists especially beginners should keep in mind to sample as many comprehensive taxa as possible in phylogenetic analyses.Supplementary InformationThe online version contains supplementary material available at 10.1186/s43008-023-00116-7.