A total of 27 strains of Oculatella were isolated, characterized and sequenced, and analysed phylogenetically with an additional environmental clone from the Atacama Desert and 10 strains isolated and sequenced by others. The strains were clearly separated based upon phylogenetic analyses conducted with a concatenated alignment of the 16S rRNA and 16S-23S ITS region of the ribosomal operons in the genus Oculatella. Differences in secondary structure of the conserved domains of the ITS region, as well as comparative analysis of P-distance among ITS regions, served to separate the strains into distinct taxonomic units. Seven new species of Oculatella were described, including four from arid to semi-arid soils (O. atacamensis, O. mojaviensis, O. coburnii, O. neakameniensis) and three from more mesic habitats, including a temperate lake (O. hafneriensis), a desert waterfall (O. cataractarum) and a Hawaiian sea cave (O. kauaiensis). The soil forms show statistically significant morphological differences, but the ranges overlap to a degree that they are not diagnosable by morphology, and these four cryptic species are characterized here using molecular characters. The more mesic species, including the type species from Mediterranean hypogea, O. subterranea, are all morphologically distinct from each other and from all four soil taxa. This report is the first to use solely molecular criteria to distinguish cryptic species of cyanobacteria.