Samples of Pithophoraceae, collected in diverse freshwater and damp terrestrial habitats from tropical and subtropical China, were characterized morphologically and ultrastructurally, and their phylogenetic position was determined based on nuclear ribosomal DNA sequences. Our phylogenetic analysis resolved a novel lineage of Pithophoraceae, sister to Aegagropilopsis. Based on our phylogenetic results, morphological observations and comparative rDNA ITS2 secondary structure analysis, we propose Chlorocladiella gen. nov., characterized by a well-developed system of prostrate filaments, and describe four new species, C. cochlea sp. nov., C. erecta sp. nov., C. medogensis sp. nov., and C. pisformis sp. nov. Two species were found growing on damp soil, which is an unusual habitat for cladophoralean green algae, indicating that the diversity of Cladophorales in terrestrial habitats may be greater than currently recognized.