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Earlier studies indicated that the genus Nectandra, currently the second-largest genus of the Neotropical Lauraceae, might be diphyletic in its traditional circumscription, but the evidence was not quite conclusive. Our phylogenetic analyses based on nuclear (ITS) and chloroplast (psbA-trnH) sequences of 45 Nectandra species as well as 42 representatives of 18 genera of the core Lauraceae (Ocotea complex, Laureae, Aiouea, Asian Cinnamomum and Persea groups) confirm the suspicion that Nectandra is diphyletic. The two groups, Nectandra s.str. and the N. coriacea group, are each well supported in the maximum parsimony and Bayesian analyses, but they are not sister to each other. Nectandra s.str. is sister to Pleurothyrium, and the clade including Nectandra s.str. and Pleurothyrium is very likely closer to the dioecious taxa of the Ocotea complex. The N. coriacea group, on the other hand, appears to be closer to bisexual taxa known as the Ocotea helicterifolia group. In addition, Nectandra s.str. is characterized by a large deletion in the psbA-trnH spacer compared to all other core Lauraceae, including its sister group Pleurothyrium. Considering these facts, Nectandra cannot be maintained in the traditional sense. We therefore transfer the species of the N. coriacea group to the oldest generic name applied to this group, Damburneya. On the basis of fossil records from the American subcontinents and in accordance with previous phylogenetic and molecular clock studies we suggest a scenario of a climate-driven migration from North to South America, with a subsequent rapid radiation of Nectandra s.str. in South America. [ABSTRACT FROM AUTHOR]