Arvicolini. Variably recognized as a genus (Ellerman, 1941; Hinton, 1923, 1926a; R. A. Martin, 1987, 1989b; Repenning, 1992; Repenning et al., 1990); a subgenus of Microtus (G. M. Allen, 1940; Ellerman and Morrison-Scott, 1951; Musser and Carleton, 1993; Ognev, 1950); a subgenus of Pitymys (Corbet, 1978c; Ellerman, 1947a, 1961; Zheng and Wang, 1980); or a subgenus of Neodon (Gromov and Polyakov, 1977; Zagorodnyuk, 1990, 1992c). Nadachowski and Zagorodnyuk (1996) identified Phaiomys leucurus as a Pleistocene relict because its M3 and m1 occlusal patterns are simple and closely similar to the extinct Allophaiomys. Chaline (1987:253) proclaimed that "an isolate of the ancestral Allophaiomys pliocaenicus stayed in the Himalayas and survives as Phaiomys leucurus." R. A. Martin (1987, 1989b) thought the m1 patterns in Allophaiomys pliocaenicus and Phaiomys to be so similar that he included the former as subgenus of the latter, and later (1995) acknowledged the differences between the two at the species level. Kormos (1932), however, who named and first described Allophaiomys, noted cranial, mandibular, and minor dental traits that contrast the two genera, and Repenning (1992) described other minute but significant dental differences between them.

Hinton (1926a:48) believed that P. leucurus is "closely related to Arvicola, and seems like the latter to be descended from some close ally of Mimomys." This relationship was formalized by Kretzoi (1955; also Repenning et al., 1990, and Repenning, 1992), who included Phaiomys, Arvicola, and Allophaiomys, all with rootless molars, in the Arvicolini (not as used here), along with Mimomys and other fossil genera that possess rooted molars and a range in hypsodonty. Phaiomys can be derived from Allophaiomys, which in turn was presumably descended "from a still inadequately identified Mimomys lineage" (Chaline et al., 1999). Both M3 and m1 occlusal patterns are also closely similar in Phaiomys and Arvicola (see Hinton, 1926a; Rekovets, 1990); moreover, the cranium of Phaiomys is stout and rugged, with very short and posteriorly constricted incisive foramina, a conformation similar to species of Arvicola but unlike any Microtus, and in particular unlike Neodon with which Phaiomys has been associated. Repenning explicitly denied any close tie between Phaiomys and Neodon, allocating the latter to Pitymyini and thereby viewing Phaiomys and Neodon as independent lineages derived from ancestral Allophaiomys. Along with the molar differences, other external and cranial contrasts—compared with Neodon, Phaiomys has longer and stouter foreclaws, a robust and deeper cranium, much shorter and posteriorly constricted incisive foramina, inflated auditory bulla, moderately inflated mastoid region, and robust mandible with prominent alveolar processes—support a view of two genera.

The hypothesis that Phaiomys is a monophyletic lineage (genus) independent of the radiation of species-groups within Microtus draws attention to its morphological connection to ancestral Allophaiomys, as argued by paleontologists, and provides a taxonomic framework to explore its postulated alliance with Arvicola, other relictual groups (Blanfordimys and Neodon), and species of Microtus using molecular analyses and a broader variety of morphological data than molar patterns. Phaiomys leucurus occurs only at high altitudes in the rugged Himalayas and Tibetan Plateau at the periphery of the Palearctic range of Arvicolini, a region Hinton (1923:155) emphasized as "that great refuge for archaic Microtines formed by the highlands of Central and South-eastern Asia."