The lichen-forming fungal genus Peltigera includes a number of species that are extremely widespread, both geographically and ecologically. However, morphological variability has lead to doubts about the distinctness of some species, and it has been suggested that hybridization is common in nature. We examined species boundaries by looking for evidence of hybridization and gene flow among seven described species collected at five sites in British Columbia, Canada. We found no evidence of gene flow or hybridization between described species, with fixed differences between species for two or more of the three loci examined. Reproductive isolation did not reflect a solely clonal mode of reproduction as there was evidence of ongoing gene flow within species. In addition, we found five undescribed species that were reproductively isolated, although there was evidence of ongoing or historical gene flow between two of the new species. These results indicate that the genus Peltigera is more diverse in western North America than originally perceived, and that morphological variability is due largely to the presence of undescribed species rather than hybridization or intraspecific variation.