The large Neotropical family Bromeliaceae presents an outstanding example of adaptive radiation in plants, containing a wide range of terrestrial and epiphytic life-forms occupying many distinct habitats. Diversification in bromeliads has been linked to several key innovations, including water- and nutrient-impounding phytotelmata, absorptive epidermal trichomes, and the water-conserving mode of photosynthesis known as crassulacean acid metabolism (CAM). To clarify the origins of CAM and the epiphytic habit, we conducted a phylogenetic analysis of nucleotide sequences for 51 bromeliad taxa by using the plastid loci matK and the rps16 intron, combined with a survey of photosynthetic pathway determined by carbon-isotope ratios for 1,873 species representing 65% of the family. Optimization of character-states onto the strict consensus tree indicated that the last common ancestor of Bromeliaceae was a terrestrial C(3) mesophyte, probably adapted to moist, exposed, nutrient-poor habitats. Both CAM photosynthesis and the epiphytic habit evolved a minimum of three times in the family, most likely in response to geological and climatic changes in the late Tertiary. The great majority of epiphytic forms are now found in two lineages: in subfamily Tillandsioideae, in which C(3) photosynthesis was the ancestral state and CAM developed later in the most extreme epiphytes, and in subfamily Bromelioideae, in which CAM photosynthesis predated the appearance of epiphytism. Subsequent radiation of the bromelioid line into less xeric habitats has led to reversion to C(3) photosynthesis in some taxa, showing that both gain and loss of CAM have occurred in the complex evolutionary history of this family.