Two fundamental life cycle types are recognized among hydrozoan cnidarians, the benthic (generally colonial) polyp stage either producing pelagic sexual medusae or directly releasing gametes elaborated from an attached gonophore. The existence of intermediate forms, with polyps producing simple medusoids, has been classically considered compelling evidence in favor of phyletic gradualism. In order to gain insights about the evolution of hydrozoan life history traits, we inferred phylogenetic relationships of 142 species of Thecata (= Leptothecata, Leptomedusae), the most species-rich hydrozoan group, using 3 different ribosomal RNA markers (16S, 18S, and 28S). In conflict with morphology-derived classifications, most thecate species fell in 2 well-supported clades named here Statocysta and Macrocolonia. We inferred many independent medusa losses among Statocysta. Several instances of secondary regain of medusoids (but not of full medusa) from medusa-less ancestors were supported among Macrocolonia. Furthermore, life cycle character changes were significantly correlated with changes affecting colony shape. For both traits, changes did not reflect graded and progressive loss or gain of complexity. They were concentrated in recent branches, with intermediate character states being relatively short lived at a large evolutionary scale. This punctuational pattern supports the existence of 2 alternative stable evolutionary strategies: simple stolonal colonies with medusae (the ancestral strategy, seen in most Statocysta species) versus large complex colonies with fixed gonophores (the derived strategy, seen in most Macrocolonia species). Hypotheses of species selection are proposed to explain the apparent long-term stability of these life history traits despite a high frequency of character change. Notably, maintenance of the medusa across geological time in Statocysta might be due to higher extinction rates for species that have lost this dispersive stage.