This paper aims to understand the species diversity, taxonomy, and phylogeny of Cystostereaceae (Agaricales), which is based primarily on material from East and Southeast Asia. Cystostereaceae is a small, understudied family of saprobes of woody plants with a worldwide distribution. Phylogenetic analyses of the LSU and ITS sequences revealed four distinct clades in the Cystostereaceae, representing the genera Crustomyces, Cystostereum, Effusomyces gen. nov., and Parvodontia. In addition, phylogenetic analyses showed that Cystidiodontia and Rigidotubus are synonyms of Crustomyces for their type of species nested within the Crustomyces clade. The new monotypic genus Effusomyces, based on specimens from Thailand, lacks any distinctive morphological features. Parvodontia, originally erected for a species from South America, is reported for the first time from Asia. The widely distributed and morphologically well-characterized Cystostereum is represented in East Asia by two new species: Cystostereum crassisporum and C. submurrayi. In addition, three new species, viz., Crustomyces albidus, Effusomyces thailandicus, and Parvodontia austrosinensis, are described and illustrated. Finally, three new combinations are proposed: Crustomyces isabellinus, C. laminiferus, and C. tephroleucus. A key to the genera and species of Cystostereaceae is provided. Our results proved that the species diversity of wood-decaying fungi in East and Southeast Asia is rich and suggested that more investigations and studies should be carried out in the future.