The new combination Thalloidima squamatum is proposed for a morphologically and phylogenetically distinct species, until now included within the variation of T. sedifolium. Compared to T. sedifolium, the species is characterized by its larger squamules and apothecia, shorter ascospores, the pale color of the excipulum, and its habitat growing on moss cushions over calcareous rock or directly on rock rather than on soil. Most of the material studied originates from Norway and Sweden, but specimens are also reported from Austria, Croatia, Germany, Greenland, Italy, Poland, Russia, Scotland and Switzerland. Key words: Ascomycota, ITS, MCM7, mrSSU, nrLSU, phylogeny, Ramalinaceae, Toninia.