The genus Protocrea is redefined, based on holotype and fresh specimens of its type species P. farinosa, using morphology of teleomorph and anamorph and phylogenetic analyses of rpb2 sequences. Data based on currently available specimens suggest the existence of three well defined and three still unnamed species. Apart from the type, P. farinosa, none of the species originally included are accepted in the genus. Species of Protocrea are characterized by perithecia formed in or on a subiculum, bicellular ascospores that disarticulate at the septum while still in the ascus and by anamorphs belonging to Gliocladium sensu stricto. For Hypocrea farinosa sensu auct. the new species H. decipiens is introduced. Hypocrea pallida is recognized as a species of Protocrea. It is closely related to P. farinosa, morphologically, phylogenetically and by habit. Protocrea illinoënsis is described here as the sister taxon of P. farinosa found in the USA. All species are polyporicolous, with the principal hosts Skeletocutis nivea for P. farinosa and P. illinoënsis, and species of Oligoporus/Tyromyces for P. pallida. In addition to hosts the main differences among these species are a stronger (orange) pigmentation of perithecia and subiculum in P. pallida and a violaceous KOH reaction in P. pallida and P. illinoënsis. P. farinosa is known only from Europe with certainty and P. illinoënsis only from the USA, while P. pallida is probably cosmopolitan. Putative synonymy of some similar species is discussed.