Based on phyletic data, a new classification of the genus Orthotrichum is proposed which divides the genus into six subgenera. The species of Orthotrichum are characteristically found on tree trunks and on rock faces in xeric habitats in the temperate portions of the world. The genus has evolved from moist habitats into xeric habitats and the adaptation of the species into these dry habitats has involved the change of at least ten characters. The groundplan/divergence method developed by W. H. Wagner is used to express graphically the probable phylogeny and relationships of the species. The ecological and distributional data correlate well with the morphologically based ground plan. The taxa with ’arctotertiary’ distributions average more primitive than the taxa with endemic North American distributions, with the latter species terminal in evolutionary specialization. In addition, a geographic origin in the Southern Hemisphere and subsequent migration of the genus into the Northern Hemisphere is hypothesized.