Seagrasses, as marine angiosperms, play important roles in coastal ecosystems. With increasing anthropogenic impacts, they are facing dramatic declines on a global scale. Halophila is well-known as a complex taxonomic challenge mainly due to high morphological plasticity. By using only a morphological approach, the genus could be oversplit or similar species could be erroneously lumped, thus masking its true biodiversity. In the present study, we incorporated genetic identification with morphological examination to reveal the identity of Halophila plants in southern and northwestern Sri Lankan waters. The nuclear ribosomal internal transcribed spacer (ITS) region and chloroplast ribulosebisphosphate carboxylase gene (rbcL) were used to identify plants collected from the Gulf of Mannar, Puttalam Lagoon, and Matara, Sri Lanka. Based on genetic identification, H. major (Zoll.) Miquel is reported for the first time from Sri Lanka, which might have been misidentified as H. ovalis in previous literature based on morphology alone. We also observed a first hybridization case of Halophila cross between H. ovalis and H. major. Two potential cryptic species were found, herein designated Halophila sp. 1 (allied to H. minor) and Halophila sp. 2 (closely related to H. decipiens). In order to clarify taxonomic ambiguity caused by morphological plasticity and the low resolution of genetic markers, further comparative phylogenomic approaches might be needed to solve species boundary issues in this genus.