A detailed illustrated key to the identification of the European species of the genera Palaemon and Palaemonetes is provided. This key has been elaborated taking into account recent changes in the species composition of both genera for European waters, such as the invalidity of Palaemon garciacidi, which is a synonym of P. longirostris, and the presence of an introduced species, Palaemon macrodactylus that has been recently recorded at different localities along the Atlantic coast. The key is based on external morphological characters to facilitate its use by non-specialists. Data on the coloration, habitat and distribution of all species are also given.