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Background: The extreme southwest of Australia is a biodiversity hotspot region that has a Mediterranean-type climate and numerous endemic plant and animal species, many of which remain to be properly delimited. We refine species limits in Anarthria, a Western Australian endemic genus characterised by the occurrence of the greatest number of plesiomorphic character states in the restiid clade of Poales. In contrast to many other groups of wind-pollinated Australian Poales, Anarthria was traditionally viewed as having well-established species limits. All six currently recognised species, which are conspicuous members of some Western Australian plant communities, were described in the first half of the 19th century. They are traditionally distinguished from each other mainly using quantitative characters. Methods: We examined extensive existing herbarium specimens and made new collections of Anarthria in nature. Scanning electron microscopy and light microscopy were used to study leaf micromorphology. Molecular diversity of Anarthria was examined using a plastid (trnL-F) and a low-copy nuclear marker (at103). This is the first study of species-level molecular diversity in the restiid clade using a nuclear marker. Results: Material historically classified as Anarthria gracilis R.Br. actually belongs to three distinct species, A. gracilis s.str., A. grandiflora Nees and A. dioica (Steud.) C.I. Fomichev, each of which forms a well-supported clade in phylogenetic analyses. Both segregate species were described in the first half of the 19th century but not recognised as such in subsequent taxonomic accounts. Anarthria dioica was first collected in 1826, then wrongly interpreted as a species of Juncus (Juncaceae) and described as Juncus dioicus. We provide a formal transfer of the name to Anarthria and for the first time report its clear and qualitative diagnostic characters: an extremely short leaf ligule and distinctive pattern of leaf epidermal micromorphology. A long ligule is present in A. gracilis s.str. and A. grandiflora. These species differ from each other in leaf lamina morphology and anatomy and have mostly non-overlapping distribution ranges. The narrower definition of species provides a basis for future phylogeographic analyses in Anarthria. Our study highlights a need for more extensive use of nuclear DNA markers in Restionaceae. The use of the low copy nuclear marker at103 allowed a clade comprising all three ligulate species of Anarthria to be recognised. The ligule character is used here for the first time in the taxonomy of Anarthria and merits special attention in studies of other restiids. In general, our study uncovered a superficially hidden but, in reality, conspicuous diversity in a common group of wind-pollinated plants in the southwest of Western Australia. [ABSTRACT FROM AUTHOR]