The orchid genus Palmorchis consists of 34 species distributed in Central and South America. It is one of the most poorly known genera of the Orchidaceae. With vegetative organs resembling the seedlings of palm trees and having inconspicuous flowers, its representatives have rarely drawn the attention of botanists, resulting in scarce availability of materials in herbaria for proper examination. This paper focusses on the diversity of Palmorchis species, their morphology, ecology, and distribution compiled from herbarium material, fieldwork, and literature data. The genus is divided into six informal groups. This review has resulted in the discovery of five new species (P. dressleriana, P. antioquiensis, P. schneideri, P. rubioi, P. chocoensis) that are described herein. A dichotomous key for the determination of all the species of the genus is provided. Line drawings of flower details and plant habit for all species are included.