Fourteen species of Pseudocyphellaria having tomentose or pubescent lobe margins and scabrid-areolate, or ±tomentose upper surfaces occur in southern South America (including Juan Fernandez, the Falkland Islands and South Georgia) south of latitude 34°S. A key and details of the anatomy, chemistry, distribution, morphology and nomenclature of each species are given. Two main groupings are represented in this study: (1) taxa with a ±scabrid-areolate or pubescent upper surface, having sessile, laminal apothecia with a well-developed excipulum proprium (lacking photobiont cells) and containing colourless, acicularfusiform spores (P. compar, P. endochrysa, P. scabrosa and P. vaccind); (2) taxa with a ±tomentose upper surface, having mainly marginal, pedicellate apothecia, with a prominent excipulum thallinum (containing photobiont cells) and with yellowbrown to brown, ellipsoid spores (P. dubia, P. guillemini, P. hirsuta, P. mallota, P. obvoluta, P. pilosella, P. santessonii and P. subrubelld). Pseudocyphellaria piloselloides and P. pluvialis are not known fertile. Pseudocyphellaria pluvialis R. Sant., P. santessonii D. Galloway and P. scabrosa R. Sant., are newly described and a new combination, P. guillemini (Mont.) D. Galloway, is proposed.