The current knowledge on the diversity of the genus Plexaurella is based on a series of dated revisions, often with no examination of types. Although being common octocorals in western Atlantic reefs, there is no consensus on an exact number of valid species. Furthermore, phylogenetic reconstructions do not support the current classification of Plexaurella within the family Plexauridae. Thus, this study reviews the genus based on examination of available types and assesses monophyly using mitochondrial (COI+igr, mtMutS) and nuclear (28S) markers, mostly from available molecular data. Until now, up to six species were considered valid. Our results show that the group is composed of at least seven previously described species: P. dichotoma, P. nutans, P. grisea, P. teres, P. grandiflora, P. regia and P. obesa; and one new species: Plexaurella rastrera sp. nov. An illustrated key to the valid species and a list of all available names are provided and the current classification of the genus is discussed. Based on congruent phylogenetic reconstructions and genetic distances, we propose the elevation of the former plexaurid subfamily Plexaurellinae to family level. Finally, based on examination of types, we propose the synonymy between Pseudoplexaura crucis and Plexaurella tenuis under Pseudoplexaura tenuis new comb.