The Southern Hemisphere contains many monotypic taxa, for which phylogenetic relationships are important to illuminate biogeographical history. The monotypic genus Lyallia is endemic to the sub-Antarctic Iles Kerguelen. A close relationship with another monotypic taxon, the New Zealand endemic Hectorella, was proposed. They share a dense cushion growth habit with small coriaceous leaves that lack stipules. The solitary flowers are bicarpellate with two sepals, 4–5 petals, 3–5 stamens and a bifid style. The fruit is an indehiscent capsule with 1–5 seeds. The flowers of Lyallia kerguelensis are hermaphroditic with four petals and three stamens whereas the flowers of Hectorella caespitosa are female, male or hermaphroditic, with five petals and five stamens. Lyallia kerguelensis is rare on Kerguelen, whereas Hectorella caespitosa is confined to the South Island of New Zealand. Our phylogenetic analysis of trnK/matK intergenic spacer and rbcL sequences provides evidence supporting a close relationship between Lyallia and Hectorella. The two species form a well-supported clade that is nested within the Portulacaceae. Divergence estimates suggest they shared a common ancestor during the late Tertiary long after the fragmentation of Gondwana. Such relationships underscore the importance of transoceanic dispersal and extinctions for plant evolution in the Southern Hemisphere.