As a recent group mainly defined by molecular data the genus Lactifluus is in need of further study to provide insight into the morphological and molecular variation within the genus, species limits and relationships. Phylogenetic analyses of nuc rDNA ITS1-5.8S-ITS2 (ITS), D1 and D2 domains of nuc 28S rDNA (28S), and part of the second largest subunit of the RNA polymerase II (rpb2) (6-7 region) sequences of 28 samples from southern China revealed three new lineages of Lactifluus. Two of them are nested in a major clade that includes the type of Lactifluus and here is treated as two new sections: L. sect. Ambicystidiati and L. sect. Tenuicystidiati. Lactifluus ambicystidiatus, described here as a new species (5 sect. Ambicystidiati), has both lamprocystidia and macrocystidia in the hymenium, a unique combination of features within Russulaceae. Furthermore, only remnants of lactiferous hyphae are present in L. ambicystidiatus and our results suggest that the ability to form a lactiferous system has been lost in this lineage. Lactifluus sect. Tenuicystidiati forms a strongly supported monophyletic group as a sister lineage to L. sect. Lactifluus. We recognize it based on the thin-walled macrocystidia and smaller ellipsoid spores with an incomplete reticulum compared with L. sect. Lactifluus. The former placement of L. tenuicystidiatus in the African L. sect. Pseudogymnocarpi is not supported. Using genealogical concordance we recognize five phylogenetic species within L. sect. Tenuicystidiati and describe two of these as new, L. subpruinosus and L. tropicosinicus. The third lineage, represented by L. leoninus, forms a sister group to L. subg. Lactariopsis sensu stricto. The three lineages provide further evidence for morphological features in Lactifluus being homoplasious. Some sections and species complexes are likely to be composed of more species and merit further investigations. Subtropical-tropical Asia is likely a key region for additional sampling.