A comprehensive revision of the genus Protousnea is presented based on morphological, chemical, anatomical, and extensive field studies in the Patagonian Andes and Tierra del Fuego, as well as by comparisons with herbarium material. A complete chemical profile is detailed for each species and sekikaic acid has been shown to be the major medullary metabolite. The new despide, 4′-O-demethylsubsekikaic acid, is described for the first time. The circumscription of species and intraspecific variability is discussed with reference to key morphological, anatomical, and chemical characters, as well as ecological preferences. Conidia are described for the first time. Protousnea malacea and P. scrobiculata have been synonymized with P. poeppigii. A key to the species is given. All the species are illustrated and new data are presented on their distribution, substrate preferences, and ecology.