Hallucinogenic fungi synthesize two controlled substances, psilocin and psilocybin. Possession of the fungal species that contain these compounds is a criminal offence in North America. Some related species that are morphologically similar, do not contain the controlled substances. Therefore, unambiguous identification of fungi to the species level is critical in determining if a mushroom is illegal. We investigate a phylogenetic approach for the identification of species that contain the psychoactive compounds. We analyzed 35 North American specimens representing seven different genera of hallucinogenic and non-hallucinogenic mushrooms. We amplified and sequenced the internal transcribed spacer region of the rDNA (ITS-1) and a 5' portion of the nuclear large ribosomal subunit of rRNA (nLSU rRNA or 28S). ITS-1 locus sequence data was highly variable and produced a phylogenetic resolution that was not consistent with morphological identifications. In contrast, the nLSU rRNA data clustered isolates from the same species and separated hallucinogen containing and non-hallucinogen containing isolates into distinct clades. With this information, we propose an approach that combines the specificity of PCR detection and the resolving power of phylogenetic analysis to efficiently and unambiguously identify hallucinogenic fungal specimens for legal purposes.