Sequences of the internal transcribed spacers (ITS) of nuclear rDNA were obtained for a broad range of dendrobium orchids for phylogenetic analysis using parsimony. A progressive approach was used to identify functional outgroups for analysis of all taxa in Dendrobium sect. Dendrocoryne. Our first, broadest analysis confirmed the results of other workers that Dendrobium sensu lato includes a major Australasian clade and a sister Asian clade. In the Australasian clade, the New Zealand species D. cunninghamii (=gen. Winika, Clements et al. 1997) was identified as the sister group to a well supported clade that includes the genera Cadetia, Diplocaulobium and Flickingeria, and Dendrobium sects Grastidium, Latouria, Spatulata, Australorchis (=gen. Australorchis), Rhizobium (= gen. Dockrillia) and Dendrocoryne. Sect. Dendrocoryne is probably polyphyletic, with two species, D. aemulum and D. callitrophilum (=gen. Tropilis), outside the main group and sect. Rhizobium (= gen. Dockrillia) nested within it. Sect. Australorchis (= gen. Australorchis) is possibly the sister group to the clade of Rhizobium plus the main group of Dendrocoryne. Thelychiton (a genus reinstated for several species in Dendrocoryne) is polyphyletic, given that Tetrabaculum (=D. tetragonum complex) and Dockrillia fall within the same clade. The splitting of the Australasian dendrobiums into various genera by other authors is excessive and unnecessary, and alternative taxonomic treatments are offered here for debate. Our study included accessions for all varieties in the following three widespread eastern Australian species: D. speciosum, D. kingianum and D. tetragonum. Each of these species showed significant sequence divergence between particular geographic regions, but some varieties had identical sequences. The splitting of D. speciosum into 11 species is not supported. We identified pseudogenes in the ITS region for D. fleckeri and D. finniganense, which appear to have evolved before these two species diverged, but support their sister relationship. Sequences for D. callitrophilum and D. (Grastidium) baileyi (the latter from GenBank) also appear to be pseudogenes, and these taxa need further study.