The Mounded Posterior Median Eyes (MPME) clade is a group of linyphiid spiders characterized by having posterior median eyes (PME) on a mound. The species diversity of this lineage, especially in the Neotropical region, is still largely unknown. In this study, we tackled one of the MPME groups, the genus Diplothyron Millidge, 1991. We have studied numerous specimens from both museums and freshly collected specimens to monograph Diplothyron. We also compiled both morphological and behavioral data from Diplothyron and representatives of higher-level lineages within Linyphiidae and several potential MPME groups to infer the phylogenetic relationships. We redescribed the type species, Diplothyron fuscus Millidge, 1991 and described the previously unknown male, and six new species: Diplothyron ballesterosi sp. nov., D. dianae sp. nov., D. monteverde sp. nov., D. nubilosus sp. nov., D. sandrae sp. nov. and D. solitarius sp. nov. We also transferred the following species from Linyphia to Diplothyron based on the study of the type material: D. chiapasia (Gertsch & Davies, 1946) comb. nov., D. linguatulus (F.O. Pickard-Cambridge, 1902) comb. nov., D. nigritus (F.O. Pickard-Cambridge, 1902) comb. nov., D. simplicatus (F.O. Pickard-Cambridge, 1902) comb. nov. and D. trifalcatus (F.O. Pickard-Cambridge, 1902) comb. nov. Diplothyron species are mainly found in the cloud forests of Central and South America, with the distribution stretching from the Colombian Andes to the Mexican Sierra Madre across the Central American mountain chains. We also provide a detailed morphological comparison between Diplothyron and closely related genera in the MPME clade, focusing on the genital morphology, including identification keys to both the MPME genera and species of Diplothyron. Our cladistic analyses recovered Diplothyron as a monophyletic group placed within the MPME clade. A newly circumscribed lineage now includes the genera Diplothyron, Dubiaranea Mello-Leitão, 1943; Linyphia Latreille, 1804; Lomaita Bryant, 1948; Microlinyphia Gerhardt, 1928; Neriene Blackwall, 1833; Notiohyphantes Millidge, 1985; Novafrontina Millidge, 1991 and Pityohyphantes Simon, 1929.