Living capybaras are a unique group of rodents. They have ever-growing cheek teeth with a complicated occlusal morphology that changes even after birth. Concerning fossil capybaras this morphological change, associated with increasing size, led to regard them as taxonomically highly diverse, including small species with simple dental morphology, and large species with complicated cheek teeth, considered as primitive and derived, respectively. Recently, it was proposed that the different morphs found in each locality actually represent individuals of different ontogenetic stages of a population or successive populations, rather than a multiplicity of coeval species in different stages of evolution. For the Pliocene, the richest locality for capybaras is Farola Monte Hermoso on the southern coast of Buenos Aires Province. This locality yielded four nominal species of capybaras, three of them are a small morph (Phugatherium cataclisticum Ameghino, “Anchimysops villalobosi” Kraglievich, “A. ultra” Kraglievich) and the other a large one (“Chapalmatherium perturbidum” (Ameghino)). In this paper we propose that they represent juveniles and adults of one species, P. cataclisticum. In order to evaluate the phylogenetic position of Phugatherium within Cavioidea a cladistic analysis was performed modifying a previously published combined matrix of morphology and DNA sequences. Phugatherium forms a monophyletic group and is the sister group of modern capybaras. Within Phugatherium the most basal species is P. novum Ameghino, whereas the type species P. cataclisticum is the sister group of P. saavedrai Hoffstetter, Villarroel and Rodrigo.