Sequence data from a broad geographical region and different habitats show that the Inocybe praetervisa clade is comprised of four closely related species. These species of section Marginatae are characterized by having nodulose spores and a stipe that is abundantly pruinose only in the upper half. Inocybe praetervisa occurs in Southern Europe in mountainous mixed coniferous forests, and is not confirmed from Northern Europe. Inocybe rivularis occurs in northern boreal forests up to the lower alpine zone, associated with Betula in moist habitats, and is not confirmed from Southern Europe. Inocybe taxocystis is confirmed as a later synonym of I. favrei. The species has a wide geographical distribution range in Europe, mainly restricted to the alpine zone and moist soils, associated with Salix herbacea. Inocybe arctica is here described as a new species. It occurs in the arctic and higher alpine zones, associated with Dryas octopetala, Salix polaris, S. reticulata and S. herbacea. All species except I. arctica are shown to have an intercontinental distribution range and are confirmed from North America. Sequence data suggest the occurrence of one additional species in the alpine zone of China. A key to the species in the I. praetervisa group is provided.