Background The fungal genus Serpula (Serpulaceae, Boletales) comprises several saprotrophic (brown rot) taxa, including the aggressive house-infecting dry rot fungus Serpula lacrymans. Recent phylogenetic analyses have indicated that the ectomycorrhiza forming genera Austropaxillus and Gymnopaxillus cluster within Serpula. In this study we use DNA sequence data to investigate phylogenetic relationships, historical biogeography of, and nutritional mode transitions in Serpulaceae. Results Our results corroborate that the two ectomycorrhiza-forming genera, Austropaxillus and Gymnopaxillus, form a monophyletic group nested within the saprotrophic genus Serpula, and that the Serpula species S. lacrymans and S. himantioides constitute the sister group to the Austropaxillus-Gymnopaxillus clade. We found that both vicariance (Beringian) and long distance dispersal events are needed to explain the phylogeny and current distributions of taxa within Serpulaceae. Our results also show that the transition from brown rot to mycorrhiza has happened only once in a monophyletic Serpulaceae, probably between 50 and 22 million years before present. Conclusions This study supports the growing understanding that the same geographical barriers that limit plant- and animal dispersal also limit the spread of fungi, as a combination of vicariance and long distance dispersal events are needed to explain the present patterns of distribution in Serpulaceae. Our results verify the transition from brown rot to ECM within Serpulaceae between 50 and 22 MyBP.