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In this study, we document and describe the new Cortinarius section Austroamericani. Our results reveal high species diversity within this clade, with a total of 12 recognized species. Of these, only C. rufus was previously documented. Seven species are described as new based on basidiomata collections. The four remaining species are only known from environmental sequences. All examined species form ectomycorrhizal associations with species of Nothofagaceae and are currently only known from Argentinean and Chilean Patagonia. The phylogenetic analysis based on the nuc rDNA internal transcriber spacer (ITS1-5.8S-ITS2 = ITS) and partial 28S gene (28S) sequences shows that this section is related to other taxa from the Southern Hemisphere. Species in this group do not belong to subg. Telamonia, where C. rufus was initially placed. Cortinarius rufus and the newly described C. subrufus form a basal clade within sect. Austroamericani that has a weakly supported relationship with the core clade. Because the two species are morphologically similar to species from the core clade and share their distribution and Nothofagaceae associations, we include them here as part of sect. Austroamericani sensu lato (s.l.) until more material is available to refine the delimitation.