The evolution of beam phase space in ionization injection into plasma wakefields is studied using theory and particle-in-cell simulations. The injection process involves both longitudinal and transverse phase mixing, leading initially to a rapid emittance growth followed by oscillation, decay, and a slow growth to saturation. An analytic theory for this evolution is presented and verified through particle-in-cell simulations. This theory includes the effects of injection distance (time), acceleration distance, wakefield structure, and nonlinear space charge forces, and it also shows how ultralow emittance beams can be produced using ionization injection methods.