Sequence data for the complete 18S rDNA gene were used to address unresolved phylogenetic issues concerning branchiopod evolution. Representative taxa include all 8 extant orders of branchiopods, additional crustaceans from the Malacostraca, and 3 alternative outgroups (Myriapoda, Chelicerata, and Insecta). The results of both maximum parsimony and neighbor-joining phylogenetic analyses are congruent and indicate that branchiopods are a monophyletic class of crustaceans, and that the Anostraca are monophyletic and the sister group to all other branchiopods. The phylogenetic position of the Laevicaudata cannot be resolved, but analyses suggest a notostracan clade that is the sister group to the Diplostraca (=Conchostraca and Cladocera). Within the Diplostraca, the Conchostraca and Spinicaudata are paraphyletic as currently recognized, because the spinicaudatan clam shrimp Cyclestheria hislopi is the sister taxon to a clade (Gymnomera) comprising the cladoceran orders Anomopoda, Ctenopoda, Haplopoda, and Onychopoda. We therefore propose that the taxonomic heading “Cladocera” include a new taxon, Cyclesthera, equal in rank to the Gymnomera. Cladoceran monophyly, as described above, is further substantiated by the shared presence of expansion segments in the 18S rDNA genes of anomopods, ctenopods, haplopods, and onychopods, as well as that of C. hislopi. A phylogenetic view of the Cladocera that includes the above taxa corroborates views based on morphological comparisons that the cladoceran lineage arose from a cyclestherid-like ancestor.