A revision is made of Australian taxa in the genera Usnea and Neuropogon. Keys and descriptions for the 44 taxa of Usnea and the 2 species of Neuropogon are given. Five new Usnea species are described: U. alboverrucata, U. effusa, U. oncodeoides, U. punctulata and U. subalpina. Two new varieties are described: U. bicolorata var. australiensis and U. hossei var. protocetrarica and three former species have been reduced to varietal status: U. hossei var. squarrosa, U. torulosa var. aurescens and U. rubicunda var. spilota. U. arida and U. rubescens have been placed in synonymy with U. rubicunda var. spilota, and U. contexta and U. capillacea have been placed in synonymy with U. articulata.