The genus Trichonectria includes a group of fungi, primarily comprising of lichen-dwelling species but also with fungicolous, bryophilous, and saprotrophic taxa. This genus is mainly characterised by the presence of thick-walled setae around the ostiole or distributed across the whole surface of the ascomata. Until now, molecular data have been available for only a limited number of species. This study aims to clarify the phylogenetic placement of Trichonectria and closely related genera within the order Hypocreales through morphological assessment and multi-locus phylogenetic analyses. Our analyses, encompassing newly obtained molecular data for Trichonectria hirta and related taxa, reveal that Trichonectria, Cylindromonium, and Phialoseptomonium form a distinct lineage within Hypocreales, which we here introduce as the new family Trichonectriaceae. The taxonomic circumscription of Trichonectria has been revised, resulting in the segregation of unrelated lineages and the formal description of two novel genera: Reticulonectria (type: R. setadpressa) and Trichonectriella (type: T. rubefaciens). To stabilise the taxonomy and facilitate further studies, we designate an epitype for Trichonectria hirta. Additionally, we propose three new species (T. coronatosetosa, T. crystallifera, T. polyblastidii) and 26 new combinations. A key for species identification within the Trichonectriaceae family is provided. This study contributes to a deeper understanding of the phylogenetic complexity and taxonomic diversity of hypocrealean fungi associated with lichen hosts. Keywords: epitypification; lichenicolous fungi; new species; Reticulonectria; taxonomy; Trichonectriaceae; Trichonectriella.