The family Magnaporthaceae contains devastating fungal cereal and grass pathogens, such as Magnaporthe oryzae (rice blast fungus, formerly known as M. grisea), M. poae (summer patch pathogen of turf grasses) and Gaeumannomyces graminis (take-all fungus of various cereals and grasses), which are popular model organisms in fungal biology and host-pathogen interaction studies. Despite their ecological and economic importance, the phylogenetic relationships among the constituent species remain ambiguous due to the lack of convincing morphological characters and paucity of molecular data for the majority of the non-model species in the family. In this study our multilocus phylogeny suggests that both Magnaporthe and Gaeumannomyces are polyphyletic genera. The phylogeny also provides insights into fungal biology and pathogenesis. Magnaporthe oryzae formed a basal clade, while M. poae and M. rhizophila formed another well supported clade with G. incrustans and G. graminis. The basal species infect both root and aerial parts of the plant host, while the aerial infection capacity seems to be lost in the taxa of the latter clade. The phylogeny is corroborated by evolution of the anamorphs and a cAMP-dependent protein kinase (CPKA) gene. Magnaporthe oryzae produces Pyricularia, while taxa in the latter clade all produce Phialophora-like anamorphs. CPKA is present in animals and many fungal lineages with various functions. In M. oryzae CPKA is essential for the formation of functional appressoria for leaf penetration. In root-infecting G. graminis var. tritici and M. poae however only non-functional CPKA homologous pseudogenes were found in their genomes. The study indicates that anamorphic and ecological features are more informative than the teleomorphic characters in defining monophyletic groups among these taxa.