The large genus Ocotea (c. 400 species) has been known to be paraphyletic with respect to most other Neotropical genera of Lauraceae for almost 20 years, but a phylogenetic classification has not yet been proposed. Here we present a phylogenetic analysis, based on ITS and psbA-TrnH sequences of 123 species from the Ocotea complex, focused on the Neotropical species with bisexual flowers. Our results show that several well-supported clades can be recognized morphologically. We discuss the principles of splitting monophyletic genera from large paraphyletic groups, and we reinstate the genus Mespilodaphne as a first step towards a phylogenetic classification. In addition, three species previously included in Aiouea are transferred to Damburneya.