Paecilomyces lilacinus was described more than a century ago and is a commonly occurring fungus in soil. However, in the last decade this fungus has been increasingly found as the causal agent of infections in man and other vertebrates. Most cases of disease are described from patients with compromised immune systems or intraocular lens implants. In this study, we compared clinical isolates with strains isolated from soil, insects and nematodes using 18S rRNA gene, internal transcribed spacer (ITS) and partial translation elongation factor 1-α (TEF) sequences. Our data show that P. lilacinus is not related to Paecilomyces, represented by the well-known thermophilic and often pathogenic Paecilomyces variotii. The new genus name Purpureocillium is proposed for P. lilacinus and the new combination Purpureocillium lilacinum is made here. Furthermore, the examined Purpureocillium lilacinum isolated grouped in two clades based on ITS and partial TEF sequences. The ITS and TEF sequences of the Purpureocillium lilacinum isolates used for biocontrol of nematode pests are identical to those causing infections in (immunocompromised) humans. The use of high concentrations of Purpureocillium lilacinum spores for biocontrol poses a health risk in immunocompromised humans and more research is needed to determine the pathogenicity factors of Purpureocillium lilacinum.