Moolabalia Alderslade, 2001 was originally described as a monotypic genus of stoloniferous soft corals within the family Clavulariidae from south-east Queensland. The type species of the genus, Moolabalia nevillecolemani Alderslade, 2001, was described using only morphological data, and no genetic data have been available for the species. Recent molecular studies, however, have demonstrated that many octocoral groups, including Clavulariidae, are polyphyletic, and therefore genera that were described without molecular data are generally classified as incertae sedis. Here, we test the phylogenetic position of the genus Moolabalia within Octocorallia using molecular data from freshly collected topotypes and 26 other species (28 samples) from 23 octocoral genera. Of the 28 samples, 25 were used in previous studies, and 3 were added in this study. These data confirm that Moolabalia belongs to Xeniidae rather than Clavulariidae. Our study is the first to obtain genetic material from topotypes of M. nevillecolemani and to genetically determine the phylogenetic position of the genus within Octocorallia. In addition, we added field images missing from the original description of Moolabalia, which have led to it being confused with a blue-polyped species of Sarcothelia (Xeniidae).