To critically examine the relationship between species recognized by phylogenetic and reproductive compatibility criteria, we applied phylogenetic species recognition (PSR) to the fungus in which biological species recognition (BSR) has been most comprehensively applied, the well-studied genus Neurospora. Four independent anonymous nuclear loci were characterized and sequenced from 147 individuals that were representative of all described outbreeding species of Neurospora. We developed a consensus-tree approach that identified monophyletic genealogical groups that were concordantly supported by the majority of the loci, or were well supported by at least one locus but not contradicted by any other locus. We recognized a total of eight phylogenetic species, five of which corresponded with the five traditional biological species, and three of which were newly discovered. Not only were phylogenetic criteria superior to traditional reproductive compatibility criteria in revealing the full species diversity of Neurospora, but also significant phylogenetic subdivisions were detected within some species. Despite previous suggestions of hybridization between N. crassa and N. intermedia in nature, and the fact that several putative hybrid individuals were included in this study, no molecular evidence in support of recent interspecific gene flow or the existence of true hybrids was observed. The sequence data from the four loci were combined and used to clarify how the species discovered by PSR were related. Although species-level clades were strongly supported, the phylogenetic relationships among species remained difficult to resolve, perhaps due to conflicting signals resulting from differential lineage sorting.