The lichen species of the genus Thamnolia, with their striking wormlike thalli and frequent occurrence in arctic and tundra environments, have often been debated with regard to the use of chemistry in lichen taxonomy. Phylogenetic studies have arrived at different conclusions as to the recognition of species in the genus, but in a recent study based on the analyses of six nuclear markers (genes or noncoding regions) of a worldwide sample of Thamnolia, we showed the existence of three well-supported lineages with two different chemistries and geographical distributions. Here, we present two analyses based on ITS and three markers, respectively, which were extended from the study mentioned above to include type specimens and additional Thamnolia strains and taxa. In these analyses the same three clades were retrieved. A putative DEAD-box helicase is used here for the first time as an informative phylogenetic marker to provide taxonomic resolution at species level. The distribution of morphological and chemical characters across the phylogeny was analyzed and it was concluded that three morphologically cryptic, but genetically well supported, species occur: T. vermicularis s. str., T. subuliformis s. str. and T. tundrae sp. nov. Thamnolia vermicularis s. str. contains individuals with uniform secondary chemistry (producing thamnolic acid) and a rather limited distribution in the European Alps, Tatra Mts and the Western Carpathians, a distribution which might result from glacial survival in an adjacent refugium/refugia. Thamnolia subuliformis s. str. is widely distributed in all hemispheres and the samples contain two chemotypes (either with thamnolic or squamatic acids). Thamnolia tundrae is described as new; it produces baeomycesic and squamatic acids, and has a distribution limited to the arctic tundra of Eurasia extending to the Aleutian Islands in North America. It may have survived the latest glaciation in coastal refugia near its present distribution. Thus, secondary chemistry alone is not suitable for characterizing species in Thamnolia, secondary chemistry and geographical origin are informative, and the ITS region can be confidently used for species recognition. Nomenclatural notes are given on several other names that have been used in Thamnolia.