The type species of Pseudopsila Johnson, P. fallax (Loew), and two related species are found to belong in Psila s. str., and Pseudopsila is thus synonymized with Psila Meigen. The remaining species formerly included in Pseudopsila form a monophyletic group here described as Xenopsila Buck subgen. n. [i.e., Psila (Xenopsila) collaris Loew comb. n., P. (X.) bivittata Loew comb. n., P. (X.) lateralis Loew comb. n., P. (X.) arbustorum Shatalkin comb. n., P. (X.) nemoralis Shatalkin comb. n., P. (X.) tetrachaeta (Shatalkin) comb. n., P. (X.) maculipennis (Frey) comb. n., P. (X.) nigricollis (Frey) comb. n., P. (X.) nigrohumera (Wang & Yang) comb. n.]. A key to the Nearctic species of Xenopsila and the Psila fallax-group is provided. The placement of Xenopsila in Psila s. l. is confirmed by newly recognised synapomorphies of the egg stage. The somewhat questionable monophyly of Psila s. l. is confirmed based on these new synapomorphies, thereby slightly expanding its taxonomic limits to also include Asiopsila Shatalkin. The morphology of the male genitalia of Xenopsila is discussed in detail, clarifying confused homologies and character polarities in the hypandrial complex. Evolutionary trends in the development of the hypandrium in the subfamily Psilinae are discussed.