The generic classification of the subfamily Phallodrilinae (with a total of 252 species) is revised according to phylogenetic principles. Morphological character patterns are assessed under the principle of maximum parsimony, but due to the poor resolution and instability in the resulting cladograms, the analysis is supplemented with intuitive weighting of synapomorphic similarities. Thirty-one genera are recognized. The former definition of the type genus Phallodrilus Picrantoni, 1902, is revised and the members of this genus are reclassified into 20 taxa, each hypothesized to be monophyletic: Phallodrilus s.str. (revised to contain the type species only), Somalidrilus gcn.n., Milliganius gen.n., Phallodriloides gen.n., Albanidrilus gen.n., Abyssidrilus gen.n., Paraktedrilus gen.n., Uniporodrilus Erséus, 1979, Inermidrilus gen.n., Gianius gen.n., Mexidrilus gen.n., Peosidrilus Baker & Erséus, 1979, Atlantidrilus Erséus, 1983, Thalassodrilus Brinkhurst, 1963, Pirodrilus gen.n., Pirodriloides gen.n., Marionidrilus gen.n., Pectinodrilus gen.n., Pacifidrilus gen.n. and Pseudospiridion gen.n. Nine new species are described from the Northwest Atlantic: Phallodriloides pinnulatus sp.n., Abyssidrilus opulentus sp.n., A. potens sp.n., A. altoides sp.n., Mexidrilus obtusus sp.n., Peosidrilus dalei sp.n., P. aduncus sp.n., P. riseri sp.n., and Atlantidrilus hamulus sp.n. The genus Discordiprostatus Baker, 1982, is synonymized with Nootkadrilus Baker, 1982.