Lecidea varians is among the most common and abundant bark-dwelling crustose lichens in temperate eastern North America. As presently delimited, it is highly variable, including chemical and morphological diversity well beyond that currently accepted for most lichen species. The generic placement of L. varians has also been questioned for decades. It has long been recognized as aberrant in Lecidea and Pyrrhospora, excluded from Lecidella, and more recently transferred to Traponora. Drawing from the results of extensive chemical, molecular phylogenetic and morphological studies, we show that L. varians and its relatives represent a previously unrecognized lineage within the speciose lichen family Lecanoraceae. The lineage appears to occupy an isolated position, distinct from the aforementioned genera, and is newly described as the genus Xanthosyne (typified by L. varians). The chemical and morphological variation within L. varians is mirrored by, but not entirely correlated with, considerable molecular diversity. A new taxonomy is proposed for L. varians and its relatives to serve as a framework for future studies. Three species are recognized: X. varians (≡ Lecidea varians), common and widespread in parts of North America; X. granularis, a new species from the Atlantic Coast of eastern North America that differs morphologically from X. varians in having a leprose thallus; and X. sharnoffiorum, a new species also found mainly along the Atlantic Coast of eastern North America, which has a coarsely granular, non-leprose thallus and produces a unique, unidentified xanthone. Multiple well-supported lineages were recovered within X. varians that correlate to varying degrees with chemical and morphological variability, as well as geographic distribution. Eight subspecies are recognized to accommodate the variation within X. varians: X. varians subsp. exigua comb. nov. (≡ Lecidea exigua) characterized by the presence of atranorin and a consistent set of three xanthones, is widespread in southern Europe and western North America (coastal California); X. varians subsp. varians (≡ Lecidea varians) is distributed mainly in northeastern North America and produces thuringione and arthothelin; X. varians subsp. morsei subsp. nov. is morphologically and chemically variable, with one chemotype (thiophanic acid) with a northeastern distribution, and the other with a unique and unidentified xanthone, found mainly in the interior U.S.A.; X. varians subsp. obscura subsp. nov. occurs mainly in the central U.S.A. and North Temperate regions, produces a unique, unidentified xanthone and generally has black apothecia with green epihymenial pigments; X. varians subsp. pseudomorsei subsp. nov. and X. varians subsp. submorsei subsp. nov. resemble X. varians subsp. morsei but differ in molecular sequence characters; X. varians subsp. subtilis comb. nov. (≡ Lecidea subtilis) and X. varians subsp. subexigua subsp. nov. occur in the Appalachian Mountains, the former producing atranorin and the latter lacking atranorin, both with thiophanic acid with or without other xanthones. In an addendum, Lecidella subviridis is discussed with respect to the genus Xanthosyne. An identification key is provided for all species and their subspecies within Xanthosyne.