Heliodinidae traditionally have been characterized on the basis of forewing venation, color and scaling, and perch behavior, but none of these attributes defines monophyly. We identify four uniquely derived autapomorphies for the family: (1) M vein of forewing two-branched, presumably with M3 lost; (2)tegumen greatly expanded posteriorly, forming a sclerotized, hollow tube; (3)ventral branches of apophyses anteriores originating from a fused transverse bridge; and (4) pupa with long, stiff dorsal and lateral setae. Phylogenetic relationships among genera and species groups of world Heliodinidae are constructed using parsimony and character compatibility as optimality criteria, with representatives of six other families of Yponomeutoidea as outgroups. Results of the analyses show Heliodines Stainton, as formerly recognized (i.e., all the species with conspicuous red markings on the forewings), to be a polyphyletic assemblage. To accommodate the New World fauna, two old names, Aetole Chambers and Embola Walsingham, have been resurrected from synonymy, and three new genera are described: Neoheliodines Hsu (Type species: Heliodines nyctaginella Gibson, 1914), Heliogemma Hsu (Type species: H. gigantea Hsu), and Euheliodines Hsu (Type species: E. chemsaki Hsu). The South American genus Crembalastis Meyrick is synonymized with Embola. A descriptive taxonomy is provided for North and Central American and Caribbean species formerly assigned to Heliodines; 45 species are treated, 25 of which are described as new: Aetole fulgida (TL: Sinaloa, Mexico), A. prenticei (Calif.), A. eximia (Baja Calif., Mexico), A. insolita (El Salvador), A. cera (Calif.), A. favonia (Calif.), A.inusitata (Baja Calif., Mexico), A. aprica (Texas), A. calciferoides (Veracruz, Mexico); Embola autumnalis (Ariz.), E. cyanozostera (Nevada), E. friedlanderi (San Luis Potosí, Mexico), E. melanotela (Haiti); Euheliodines chemsaki (S. L. P.,Mexico), E. jaliscella (Jalisco, Mexico); Heliogemma gigantea (Jalisco, Mexico), H. grandis (Tamaulipas, Mexico), H. preclara (Jalisco, Mexico); Neoheliodines albidentus (Ariz.), N. arizonense (Ariz.), N. eurypterus (Ariz.), N. hodgesi (Ariz.), N. megostiellus (Jalisco, Mexico), N. melanobasilarus (San Luis Potosí, Mexico), N. vernius (Calif.). The remaining genera of Heliodinidae s. str. are listed, and we provide diagnoses, illustrations of genitalia for representative species, literature references, and a list of described species. Adults of many Heliodinidae hold their hind legs elevated above the body when perched, which has been regarded as characteristic of the family. However, it is neither limited to heliodinids nor common to all of them. All species of Aetole and Scelorthus and some species of Embola and Copocentra hold the legs elevated, while observed members of other genera do not. The function of this behavior is uncertain. Larval host plants are recorded for 33 species (14 newly discovered during this study), about 45% of the described world fauna; 30 (90%) of these are specialists on Caryophyllales, especially Nyctaginaceae. The remaining three are members of three unrelated genera, and they feed on plants in three orders (Piperales, Apiales, and Myrtales). Phylogenetic analyses indicate these are derived adaptations from a Caryophyllales-feeding ground plan.