The complete genome sequences of two dairy phages, Streptococcus thermophilus phage 7201 and Lactobacillus casei phage A2, are reported. Comparative genomics reveals that both phages are members of the recently proposed Sfi21-like genus of Siphoviridae, a widely distributed phage type in low-GC-content gram-positive bacteria. Graded relatedness, the hallmark of evolving biological systems, was observed when different Sfi21-like phages were compared. Across the structural module, the graded relatedness was represented by a high level of DNA sequence similarity or protein sequence similarity, or a shared gene map in the absence of sequence relatedness. This varying range of relatedness was found within Sfi21-like phages from a single species as demonstrated by the different prophages harbored by Lactococcus lactis strain IL1403. A systematic dot plot analysis with 11 complete L. lactis phage genome sequences revealed a clear separation of all temperate phages from two classes of virulent phages. The temperate lactococcal phages share DNA sequence homology in a patchwise fashion over the nonstructural gene cluster. With respect to structural genes, four DNA homology groups could be defined within temperate L. lactis phages. Closely related structural modules for all four DNA homology groups were detected in phages from Streptococcus or Listeria, suggesting that they represent distinct evolutionary lineages that have not uniquely evolved in L. lactis. It seems reasonable to base phage taxonomy on data from comparative genomics. However, the peculiar modular nature of phage evolution creates ambiguities in the definition of phage taxa by comparative genomics. For example, depending on the module on which the classification is based, temperate lactococcal phages can be classified as a single phage species, as four distinct phage species, or as two if not three different phage genera. We propose to base phage taxonomy on comparative genomics of a single structural gene module (head or tail genes). This partially phylogeny-based taxonomical system still mirrors some aspects of the current International Committee on Taxonomy in Virology classification system. In this system the currently sequenced lactococcal phages would be grouped into five genera: c2-, sk1, Sfi11-, r1t-, and Sfi21-like phages.