The generic level, systematic relationship in Palaemoninae was inferred from analyses based on the mitochondrial 16S rDNA and nuclear Histone (H3) genes, primarily focussed on the genera Palaemon and Palaemonetes, as previous morphological and molecular studies indicated potential paraphyly in some genera. Palaemonetes, Exopalaemon, Coutierella and certain Palaemon recover as a strongly supported monophyletic clade, but with the exception of Palaemon concinnus, P. pandaliformis and P. gracilis. Within this clade, six major clades are identified with geographic relationships appearing stronger than generic relationships. The data strongly suggest that Palaemon, Palaemonetes, Exopalaemon and Coutierella are synonymous and that the morphological characters currently used to define these genera require re-evaluation. Freshwater species are not closely related to each other, but instead group with geographically close marine species, suggesting multiple invasions of freshwater by physiologically plastic ancestors rather than a single colonisation event with subsequent speciation.