Phylogenetic relationships among all of the 47 recognised species and 10 putative new taxa of Utricularia subgenus Polypompholyx, were assessed using maximum parsimony and Bayesian inference analyses of DNA sequences representing the plastid rps16 intron, trnL–F intron and spacer regions and the trnD–T intron. We found strong jackknife and posterior-probability support for a monophyletic subgenus Polypompholyx and a sister relationship between the sections Polypompholyx   Tridentaria and Pleiochasia. Within the section Pleiochasia, are two well-supported major clades, each containing three supported clades. Our S-DIVA biogeographic analysis, using five major Australian drainage basins and New Zealand as geographic areas, estimated two early vicariance events between south-western and north-western mainland regions, corresponding with known periods of increased aridity at 15 and 6 million years ago. Subsequent dispersal events were estimated between northern and south-eastern Australia, with recent dispersal of species from south-western regions to the south-east and New Zealand occurring between 4 million and 1 million years ago. There were 28 speciation events inferred within the north-western region, followed by 9 for the south-western and south-eastern regions, indicating that the north-western monsoonal savanna habitats are a biodiversity hotspot for the lineage. We also show the evolutionary shifts in growth habit, and show that lifecycle corresponds strongly with shifts in seasonality between temperate and monsoonal regions. On the basis of our molecular phylogenetic results and morphology, we here designate a new sectional ranking for subgenus Polypompholyx.