Abstract: The lignicolous saprotrophic genus Entonaema contains six formally accepted species: E. liquescens (type species), E. cinnabarinum, E. globosum, E. dengii, E. moluccanum, and E. siamensis. Its stromatic ascomata develop on the surface of dead wood remnants; they are rather large, globose to irregularly shaped, and vividly coloured. The fresh stroma interior is filled with a liquid matter. In early studies, the genus was considered to have a preference for tropical habitats, while in more recent field research, numerous collections have been added from warm, temperate areas of Europe, North America, and Asia. Our taxonomic and phylogenetic studies were based on freshly collected E. cinnabarinum from Croatia and E. liquescens from the USA. A phylogenetic study of the sequence alignment of four concatenated gene regions (ITS, LSU, rpb2, and β-tub) revealed the true taxonomic position of Entonaema within Hypoxylaceae (Xylariales), a sister to Hypoxylon carneum. Detailed macroscopic and microscopic descriptions of E. cinnabarinum are accompanied by drawings and colour photographs, while the study of E. liquescens is focused on stromatal microchemical reaction. With new information, the worldwide identification key to the putative species of Entonaema is proposed. Ecological data and biogeographical patterns were studied using all available and reliable sources of recorded data. Climatic preferences of the two most widespread Entonaema species, E. liquescens and E. cinnabarinum, are discussed in detail.