The family Gymnophthalmidae comprises ca. 220 described species of Neotropical lizards distributed from southern Mexico to Argentina. It includes 36 genera, among them Proctoporus, which contains six currently recognized species occurring across the yungas forests and wet montane grasslands of the Amazonian versant of the Andes from central Peru to central Bolivia. Here, we investigate the phylogenetic relationships and species limits of Proctoporus and closely related taxa by analyzing 2121 base pairs of mitochondrial (12S, 16S, and ND4) and nuclear (c-mos) genes. Our taxon sampling of 92 terminals includes all currently recognized species of Proctoporus and 15 additional species representing the most closely related groups to the genus. Maximum parsimony, maximum likelihood and Bayesian phylogenetic analyses recovered a congruent, fully resolved, and strongly supported hypothesis of relationships that challenges previous phylogenetic hypotheses and classifications, and biogeographic scenarios. Our main results are: (i) discovery of a strongly supported clade that includes all species of Proctoporus and within which are nested the monotypic Opipeuter xestus (a genus that we consider a junior synonym of Proctoporus), and two species of Euspondylus, that are therefore transferred to Proctoporus; (ii) the paraphyly of Proctoporus bolivianus with respect to P. subsolanus, which is proposed as a junior synonym of P. bolivianus; (iii) the detection of seven divergent and reciprocally monophyletic lineages (five of them previously assigned to P. bolivianus) that are considered confirmed candidate species, which implies that more candidate species are awaiting formal description and naming than currently recognized species in the genus; (iv) rejection of the hypothesis that Proctoporus diversified following a south to north pattern parallel to the elevation of the Andes; (v) species diversity in Proctoporus is the result of in situ diversification through vicariance in the grasslands of the high Andes, with at least five dispersals contributing to montane forest species.