Although members of the crustacean genus Daphnia have been the target of much research, there is little understanding of the group's evolutionary history. We addressed this gap by inferring a phylogeny for one of the major species groups (longispina) using nucleotide sequence variation of a 525-bp segment of the mitochondrial 12S rDNA and allozyme variation at 21 loci. We identified the major lineages and their relationships, assessed the phylogenetic utility of the few morphological characters in the group, and examined Daphnia phylogeography. Nuclear and mtDNA phylogenies were generally concordant in recognizing the same four species complexes. An exception was the position of Daphnia galeata mendotae. The allozyme tree paired this species with the Daphnia rosea lineage, whereas the mtDNA trees grouped D. g. mendotae with Daphnia galeata galeata. This discordance was consistent with the reticulate evolution of nuclear genes supporting the hypothesis that D. g. mendotae represents a case of homoploid hybrid speciation. Striking morphological stasis in the longispina group was evidenced by its very limited morphological divergence over an estimated 100 MY, and by the unusual transitional saturation of the conservative 12S rRNA gene within a species group. Phylogenetic inference also provided evidence that similarities in cephalic crest shape likely resulted from convergent or parallel evolution among species. Endemism at the continental level was indicated for previously cosmopolitan species, but the estimated times of these divisions were inconsistent with vicariance events suggesting recent dispersal among continents. A significant role for divergent selection in new habitats during speciation was suggested by the neighboringly sympatric distributions of four sister species pairs over broad geographic areas.