In this study, we assessed the phylogenetic relationships among members of Ceratostomella and the morphologically similar genus Xylomelasma, currently classified within the Sordariomycetes. Our phylogenetic analyses, utilising three and five gene markers, revealed that species from these two genera are congeneric, supporting the transfer of Xylomelasma to Ceratostomella. Consequently, we propose two new combinations: C. sordidacomb. nov. and C. novae-zelandiaecomb. nov. In addition, we identified two cryptic species within the C. sordida species complex, which are described as C. cryptasp. nov. and C. melanosporasp. nov. Traditional micromorphological characters have proven insufficient for differentiating these new species; however, they are clearly distinguishable by molecular data, particularly using the internal transcribed spacer region ITS1-5.8S-ITS2 (ITS) of the nuclear rRNA cistron, and genes encoding the second largest subunit of RNA polymerase II (rpb2), and translation elongation factor 1-α (tef1-α) as primary and secondary barcodes. This study provides new insights into the morphological characteristics of Ceratostomella, identifying the ascogenous system as an important diagnostic trait at the generic level, which distinguishes Ceratostomella from morphologically similar fungi. Ceratostomella is currently recognised with eight species. We also investigated the relationship between Ceratostomella and the closely related Barbatosphaeria. The lack of statistical support in the Maximum likelihood analysis is discussed and the inclusion of Ceratostomella in Barbatosphaeriaceae is not supported. Ceratostomella is accepted as a genus incertae sedis, while Barbatosphaeriaceae remains a monotypic family. The global diversity of Ceratostomella is inferred from metabarcoding data and published field observations. Biogeographic analysis indicates that members of Ceratostomella are widespread, found in soil and decaying wood, as well as in air, dust, roots, shoots, and water across temperate, subtropical and tropical regions in both the Northern and Southern Hemispheres. We are concurrently publishing whole-genome analyses of three ex-type strains of Ceratostomella, i.e. C. crypta, C. melanospora and C. sordida. This effort aims to establish a new standard for high-quality taxonomic studies, which, in accordance with current trends, should incorporate whole-genome sequencing data for future research and application. Our findings underscore the importance of integrating morphological, biogeographic and molecular data for accurate species delineation and highlight the complexity within the genus Ceratostomella.