The aim of this paper is to document the presence, diversity and distribution of Megalomma in Australia. This could be considered the first valid record of the genus in this continent as the only species previously recorded was transferred to another genus (Knight-Jones, 1997). The species diversity found during this study indicates that the occurrence of Megalomma in Australia has been overlooked, as the genus is well represented with at least seven species, living in a range of habitats and depths, and three of which are herein described as new, M. phyllisae n.sp, M. inflata n.sp. and M. interrupta n.sp. Cladistic analyses have been performed after the generation of a matrix of morphological features including those of some well documented species, in order to find informative characters for grouping species and to test the validity of previous artificial classifications. According to the phylogenetic hypothesis presented herein, the fusion of dorsal collar margins to the faecal groove and the presence of collar "pockets" characterizes the apomorphic clade of Megalomma species but the number of radiolar eyes is a homoplastic character, varying substantially in the Megalomma radiation, meaning that the traditional groups should be reviewed. A dichotomous key is provided to facilitate Australian species identification.