The Lachnospiraceae family holds promise as a source of next-generation probiotics, yet a comprehensive delineation of its diversity is lacking, hampering the identification of suitable strains for future applications. To address this knowledge gap, we conducted an in-depth genomic and functional analysis of 1868 high-quality genomes, combining data from public databases with our new isolates. This data set represented 387 colonization-selective species-level clusters, of which eight genera represented multilineage clusters. Pan-genome analysis, single-nucleotide polymorphism (SNP) identification, and probiotic functional predictions revealed that species taxonomy, habitats, and geography together shape the functional diversity of Lachnospiraceae. Moreover, analyses of associations with atherosclerotic cardiovascular disease (ACVD) and inflammatory bowel disease (IBD) indicated that several strains of potentially novel Lachnospiraceae species possess the capacity to reduce the abundance of opportunistic pathogens, thereby imparting potential health benefits. Our findings shed light on the untapped potential of novel species enabling knowledge-based selection of strains for the development of next-generation probiotics holding promise for improving human health and disease management.