The intraspecific variation of the morphologically variable moss Distichium capillaceum is studied based on the nuclear marker ITS (1 and 2) and the plastid markers rpl16 and trnL-trnF for 86 specimens collected mainly in Scandinavia, using D. inclinatum as outgroup. A wider specimen set, including GenBank sequences of eight D. capillaceum and two D. hagenii, was analysed based on ITS only. Since potential reticulation was revealed and significant evidence for recombination was found, network analyses were performed. The ITS analysis revealed D. hagenii as more closely related to D. capillaceum than to D. inclinatum. The analysis based on all molecular markers identified one grade and four lineages in D. capillaceum. No lineage received strong molecular support, and morphology could not effectively distinguish the five entities. The grade and four lineages occur in different geographical areas, which were suggested to be a result either of different glacial and postglacial histories or different habitat requirements. The lack of high jacknife support for the lineages in combination with strongly overlapping morphological variation and the geographic differentiation between the entities is interpreted as indicating incipient speciation.