The holomorphic genus Bionectria, with anamorphs classified in Clonostachys, is characterized and compared to related taxa of the Hypocreales. Bionectria species form penicillate, solitary or sporodochial conidiophores and imbricately arranged conidia held in chains or columns that may collapse into slimy masses. The superficially free ascomata often occur on other fungi, mainly ascomycetes, on bark of recently dead trees, or on decaying leaves. Anamorphs of Bionectria species, such as Clonostachys rosea (= Gliocladlium roseum), are often encountered in soil and are known as destructive mycoparasites. Based mainly on characters of the teleomorph, such as occurrence of a supporting stroma, the interface between the stroma and the perithecial wall, anatomy of the perithecial wall, ascospore morphology, habit on and type of the natural substratum, six infrageneric subgroups are distinguished. Characters of the anamorph, such as the tendency to form dimorphic conidiophores and/or sporodochia, occurrence of intercalary phialides or setae, conidial shape, and pigmentation of conidial masses, partly support the subgroups delimited using teleomorph characters, but all subgroups can be linked with each other by intermediate patterns of anamorphs. Based on the general occurrence of penicillate conidiophores and suspected similarities in their life-styles, classification of all species in one genus is suggested. To address differences found in the anamorphs, the terms dendrodochium-, sesquicillium-, myrothecium-, and gliocladium-like are used. Analyses of rDNA sequences suggest monophyly of all taxa considered, while certain phenotypic characters appear in paraphyletic positions.