The mealybugs form the second largest family group within the scale insects (Hemiptera: Coccomorpha), with about 2,300 species in almost 300 genera, and is currently considered to include two families, Pseudococcidae and Rhizoecidae. D.A. Downie & P.J. Gullan undertook the first molecular phylogenetic study of the group, and recognised three major clades which more or less equated to the Pseudococcinae, Phenacoccinae and Rhizoecinae. More recently, N.B Hardy and co-workers did a similar large study with more taxa, and included a morphological data matrix based on the adult female, adult males and first-instar nymphs; their results were broadly similar to those of Downie & Gullan except they found that the Rhizoecinae were included within the Phenacoccinae. Since this latter study, the Rhizoecinae has been recognized as a separate family, Rhizoecidae, and is used as an outgroup in this study. Both previous studies used mainly Nearctic, Tropical and Australian species in their analysis but, in the present study, we use only species collected in the Palaearctic and, in addition to a molecular study, add a data matrix based on the morphology of the adult female. We (1) review the phylogeny of mealybugs, focusing on Palaearctic taxa; (2) improve our understanding of mealybug molecular phylogeny based on Palaearctic mealybug taxa; (3) add morphological characters not previously included in systematic analyses; and (4) identify morphological characters that diagnose apparently monophyletic subgroups within the Pseudococcidae. The overall congruence between gene trees provides strong support for the subfamilies Pseudococcinae and Phenacoccinae, and for the tribes Planococcini, Trabutinini and Pseudococcini. Our results also strongly suggest that, as currently understood, the genera Phenacoccus (in Phenacoccinae) and Trionymus and Pseudococcus (in Pseudococcinae) are non-monophyletic. These results are discussed and compared with earlier studies.