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Loliinae (Poaceae, Pooideae) encompass a large group of genera closely related to Festuca, the largest genus in the subtribe, which as traditionally circumscribed has been shown to be highly paraphyletic. In this investigation we combined molecular and morphological data representing 20 genera of Loliinae and closely related subtribes. Combined analysis of nucleotide sequences from the nuclear ITS and chloroplast trnL–F regions and structural characters recovered a consensus topology that shows Loliinae to be monophyletic and possessing two main clades—the fine-leaved Festuca clade that includes Ctenopsis, Micropyrum, Narduroides, Psilurus, Vulpia, and Wangenheimia, and the broad-leaved Festuca clade that includes Lolium and Micropyropsis. The presence of morphologically intermediate, unresolved, or poorly supported taxa (Castellia, Festuca subgen. Subulatae and subgen. Leucopoa p.p., and Festuca sect. Amphigenes p.p.) among the two groups points to a potential evolutionary trend from ancestral broad-leaved taxa to the more recently evolved fine-leaved taxa. Alternate classifications are evaluated for subtribes Loliinae, Cynosurinae, Dactylidinae, and Parapholiinae. We propose to maintain a paraphyletic Festuca as presently circumscribed and not to divide the polyphyletic Vulpia and Festuca infrageneric taxa until more phylogenetic data become available.