One hundred and forty-five population samples of twelve New Zealand species of Parahebe were grown under uniform conditions in a glasshouse. Data collected on cytology, crossing relationships, geographic variation, breeding systems and field observations on flowering periods, hybridisation, ecology and distribution were used in the production of a taxonomic revision of the genus in New Zealand. The New Zealand species of Parahebe are all self-compatible hermaphrodites. There are six widespread streamside xenogamous species and six predominantly autogamous subalpine species with narrower distribution. In addition, P. canescens is xenogamous and adapted to a very specialised habitat. P. linifolia has both xenogamous and autogamous populations, described here as two subspecies because of their distinct distributions and morphological features. New chromosome counts are reported for P. laxa (n=42) and nine populations of P. catarrectae (n=21). Natural hybridisation is infrequent in Parahebe; only four putative hybrid combinations are known. Hybridisation between various species pairs is prevented by differences in habitat, distribution and breeding system. Fewer artificial crosses were successful than reported in several other New Zealand genera, and in some cased hybrids were weak. Allopolyploid origins are suggested for P. olsenii and P. plano-petiolata. Geographic variation in several species is described. A principal component analysis and other statistical techniques were used to study variation in P. catarrectae Studies of floral morphology, cytology, crossing relationships and clinical variation patterns in P. catarrectae support its recognition as a single, though widespread, variable species. One group of populations is given subspecific status as subsp. glabriuscula. In terms of vegetative and floral morphology, subsp. glabriuscula is considered more distinct than any previously described taxon now included in P. catarrectae. This conclusion is supported by the principal component analysis. P. olsenii and P. laxa are reinstated as species. The roles of hybridisation, adaptation to new habitats, geographic variation, reproductive biology and allopolyploidy in the evolution of the genus are discussed. It is suggested that Parahebe evolved from Veronica and that Detzneria, Hebe and Pygmea are specialised derivatives of Parahebe-like ancestor.