The two most devastating diseases of cacao (Theobroma cacao)--the source of chocolate--in tropical America are caused by the fungi Crinipellis perniciosa (witches' broom disease) and Moniliophthora roreri (frosty pod rot or moniliasis disease). Despite the agricultural, socio-economic and environmental impact of these fungi, most aspects of their life cycles are unknown, and the phylogenetic relationships of M. roreri have yet to be conclusively established. In this paper, extensive phylogenetic analyses of five nuclear gene regions (28S rDNA, 18S rDNA, ITS, RPB1, and EF1-alpha) confirm that C. perniciosa and M. roreri are sister taxa that belong in the Marasmiaceae (euagarics). Furthermore, these taxa form part of a separate and distinct lineage within the family. This lineage includes the biotrophic fungi Moniliophthora perniciosa comb. nov. and M. roreri, as well as one undescribed endophytic species. The sister genera to Moniliophthora are Marasmius, Crinipellis and Chaetocalathus, which consist mainly of saprotrophic litter fungi.