The species of the genus Psathyrella listed by Romagnesi (1953: 355) in the groups of Atomatae and Pronae are brought into one section, section Atomatae. This section is divided into a coprophilous and a non-coprophilous group. Fifty-four collections of species, belonging to this section were examined, including type material of Drosophila picta Romagn., D. orbitarum Romagn., and D. albidula Romagn.; herbarium material of Psathyrella atomata (Fr.) Quél, and Drosophila infida Quél., received from Prof. H. Romagnesi; type material of Psathyrella coprophila Watling, P. fimetaria Watling, and P. vinosofulva Orton. A new species, P. Romagnesii Kits van Wav. and a new variety, P. prona var. utriformis Kits van Wav. are described and it is argued that the latter name is to replace the name P. vinosofulva. It is argued that Agaricus atomatus Fr. is a nomen dubium, while D. albidula, and D. picta are to be regarded as mere forms of P. prona, that D. orbitarum is a mere colour variant of P. prona, and that D. infida is identical with P. prona. Psathyrella prona f. cana Kits van Wav. is proposed for what hitherto has always been known as P. atomata (sensu Bresadola and Lange). It is also argued that P. coprophila and P. fimetaria are conspecific. A key to the species of this section is given.