Species diversity and species limits of the small fruit-eating bats, genus Dermanura (Phyllostomidae: Stenodermatinae) were examined. Estimates of species diversity based on classical morphological criteria (current taxonomy) were compared to diversity estimates based on monophyly and cytochrome-b sequence divergence. The most recent taxonomic list included nine species, whereas the genetic based list contained 11: anderseni, azteca, bogotensis, cinerea, glauca, gnoma, phaeotis, rava, rosenbergi, tolteca, and watsoni, of which three (bogotensis Andersen, rava Miller, and rosenbergi Thomas) have been considered synonyms of cinerea, glauca, phaeotis, and tolteca by previous authors. In addition, we consider incomitata to be a synonym of watsoni. Phylogenetic analyses of mtDNA sequences resolved the interrelationships among taxa and prompted us to re-evaluate some morphological characters that support the distinction of all the recognized taxa, therefore providing a robust estimate of species status. A phylogenetic tree revealed a geographic component to the diversification of Dermanura, including a historical connection between western Andean and Middle American biota. In South America, no species has been recorded from both sides of the Andes Mountains, and at least one clade (glauca, gnoma, and bogotensis) is restricted to the eastern versant of the Andes. Using genetic data (monophyly and genetic distance) to identify species we were able to produce testable genealogical and biogeographic hypotheses to facilitate further studies.