Understanding the phylogenetic relationships of the three major urochordate groups within the deuterostomes is central to understanding the evolution of the chordates. We have prepared a detailed phylogenetic analysis of urochordates based on comparisons of 10 new urochordate 18S ribosomal DNA sequences with other urochordate sequences in GenBank. Maximum parsimony, neighbor-joining, minimum evolution, and maximum likelihood analyses of this large urochordate data set are consistent with a topology in which the urochordates are monophyletic within the deuterostomes and there are four separate clades of urochordates. These four distinct clades—styelid + pyurid ascidians, molgulid ascidians, phlebobranch ascidians + thaliaceans, and larvaceans—are mostly consistent with traditional morphological hypotheses and classifications. However, we find that the ascidians may not be a monophyletic group (as they have been considered traditionally) but instead appear paraphyletic. Another disparity with traditional classification is that the thaliaceans do not form a separate urochordate clade but rather cluster with the phlebobranch ascidians. Larvaceans have long branch lengths, which can be problematic for molecular phylogenetic methods, and their position within the urochordates cannot be unequivocally determined with 18S rDNA. This is important because the tadpole morphology of larvacean and ascidian larvae is the key trait of interest that distinguishes urochordates as chordates. Nevertheless, the present data set resolves at least three clades of urochordates and suggests strongly that urochordates form a monophyletic clade within the deuterostomes.