Western North America is the global centre of diversity for Letharia, a distinctive and cryptically diverse genus of lichenized fungi belonging to the Parmeliaceae. The genus is characterized by a shrubby, fruticose habit and presence of vulpinic acid. Previous studies using multiple fungal nuclear loci revealed the existence of two distinct species-level lineages within the traditional concept of L. vulpina and four such lineages within L. columbiana. Here we use molecular sequence data in an attempt to settle long-standing taxonomic issues in the genus. Our results confirm the widespread existence within L. vulpina s. lat. of two distinct species-level groups, each forming a mutually exclusive partnership with a separate algal clade within Trebouxia jamesii s. lat. Accordingly, we formally describe the segregate species L. lupina sp. nov. Our results also support the evolutionary independence of four candidate species previously circumscribed from L. columbiana s. lat. One of these lineages, L. ‘gracilis’, has already received species recognition as L. gracilis, while a second, L. ‘lucida’, is epitypified here against L. columbiana s. str. Based on results from species delimitation analyses under the multispecies coalescent model, the two remaining lineages, L. ‘barbata’ and L. ‘rugosa’, also warrant formal taxonomic recognition; however, we refrain from describing these species pending additional studies of diagnostic characters, ecological preference, and distributions.