The diversity of Lycoperdaceae in Israel was studied. Molecular phylogenetic relationships within the family, and genus Lycoperdon in particular, were inferred using original ITS rDNA sequences of 58 samples belonging to 25 species from Israel and six other countries, together with 66 sequences stored in the GenBank database. The current molecular phylogenetic study recovered the family Lycoperdaceae as a monophyletic group, which was supported in both maximum likelihood and Bayesian analyses. The clades corresponding to the genera Apioperdon, Bovista, Calvatia, Disciseda, and Lycoperdon were revealed. The taxonomic structure of the named genera was partially resolved. Within the genus Lycoperdon, some species received significant statistical support; however, their relationships, as well as the problem of the genus monophyly, mostly remained questionable. As a result of a thorough literature survey, extensive sample collection, and studies of the material stored in the Herbarium of the Institute of Evolution, University of Haifa (HAI, Israel), fifteen species representing five genera were found in the territory of Israel. Six species, namely Apioperdon pyriforme, Bovista aestivalis, Calvatia candida, Lycoperdon decipiens, L. niveum, and L. perlatum, are new additions to the diversity of Lycoperdaceae in Israel. Detailed macro- and micromorphological descriptions, ecology, geography, and critical notes, together with light microscopy photos and SEM micrographs, are provided. In-depth discussion on some taxonomically challenging species is presented.