The distribution of microbial species, including fungi, has long been considered cosmopolitan. Recently, this perception has been challenged by molecular studies in historical biogeography, phylogeny and population genetics. Here we explore this issue using the fungal morphological species Thelonectria discophora, one of the most common species of fungi in the family Nectriaceae, encountered in almost all geographic regions and considered as a cosmopolitan taxon. In order to determine if T. discophora is a single cosmopolitan species or an assemblage of sibling species, we conducted various phylogenetic analyses, including standard gene concatenation, Bayesian concordance methods, and coalescent-based species tree reconstruction on isolates collected from a wide geographic range. Results show that diversity among isolates referred as T. discophora is greatly underestimated and that it represents a species complex. Within this complex, sixteen distinct highly supported lineages were recovered, each of which has a restricted geographic distribution and ecology. The taxonomic status of isolates regarded as T. discophora is reconsidered, and the assumed cosmopolitan distribution of this species is rejected. We discuss how assumptions about geographically widespread species have implications regarding their taxonomy, true diversity, biological diversity conservation, and ecological functions.