Atoposaurid crocodylomorphs represent an important faunal component of Late Jurassic to Early Cretaceous Laurasian semi-aquatic to terrestrial ecosystems. Despite being consistently recovered at the base of Neosuchia, the major crocodylomorph lineage leading to extant crocodilians, their species-level taxonomy and inter-relationships remain poorly understood. We present a systematic taxonomic review of the group, noting numerous anatomical differences between specimens from geographically discrete localities in the Late Jurassic of western Europe. In particular, we recognise a new species of Alligatorellus from Germany, previously referred to the contemporaneous French taxon Alligatorellus beaumonti, and synonymise the sympatric Alligatorium paintenense with Alligatorium franconicum. A comprehensive species-level phylogenetic analysis of unambiguous atoposaurids (15 OTUs and 450 characters) recovers a clade comprising Alligatorellus, Alligatorium, Atoposaurus, and Montsecosuchus.Theriosuchus is shown to represent a monophyletic, diverse, and long-lived genus that forms the sister taxon to this clade of atoposaurids. The poorly known Theriosuchus grandinaris, from the Early Cretaceous of Thailand, is excluded from this grouping and is instead positioned at the base of Atoposauridae, although this likely reflects its incomplete nature. Incorporation of putative atoposaurids, such as Karatausuchus from the Late Jurassic of Kazakhstan, will be crucial in clarifying these relationships. Our revision of atoposaurids leads us to recognise the existence of three sympatric genera in the Late Jurassic of western Europe, with a distinct species of Alligatorellus, Alligatorium, and Atoposaurus present in both French and German basins. This high diversity of closely related species might have been caused by allopatric speciation, driven by fluctuating highstand sea-levels during an interval when western Europe formed an island archipelago system. It is possible that the small body size of atoposaurids resulted from island dwarfing during this interval, but testing of this idea will have to await the discovery of more basal forms from non-island settings.