Proteaceae subfamily Persoonioideae, as presently circumscribed, consists of the monogeneric tribe Placospermeae (Placospermum) and the tribe Persoonieae. The latter comprises the diverse genus Persoonia and monospecific genera found in New Zealand (Toronia), New Caledonia (Garnieria) and south-western Western Australia (Acidonia). Persoonia has 101 species distributed across Australia and has been classified into 11 informal groups. Using data derived from plastid DNA (trnL–trnF region), nuclear rDNA (ITS) and morphological characters, we constructed a phylogeny of Persoonioideae and compared the results to the existing classification. Bayesian and parsimony analyses indicated that Persoonia, as currently defined, is non-monophyletic. The molecular data and combined molecular and morphological data place Toronia in a moderately well supported clade with the monophyletic Rufiflora group of Persoonia from Western Australia. This clade is sister to Acidonia, Garnieria and the remaining Persoonia species. Of the other informal groups in Persoonia, the Teretifolia, Quinquenervis, Laurina, Arborea, Graminea and Chapmaniana groups are supported as monophyletic. The Lanceolata group can be re-circumscribed to be monophyletic by the addition of P. elliptica R.Br. (Longifolia group) and the Dillwynioides group. Relationships within this large, geographically widespread clade are largely unresolved and low DNA-sequence variation within it suggests a recent radiation followed by isolation in south-western and eastern Australia. All endemic Tasmanian Persoonia (Gunnii group taxa) are unresolved at the second-most basal node of the Persoonieae. Our results suggest that the Rufiflora group should be treated as a new genus and that the infrageneric taxonomy of Persoonia requires minor amendment.