Parsimony analysis of matK and rbcL sequence data, together with a nonmolecular database, yielded a well-resolved phylogeny of Cupressaceae sensu lato. Monophyly of Cupressaceae sensu stricto is well supported, and separate northern and southern hemisphere subclades are resolved, with Tetraclinis within the northern subclade; there is no support for any of the tribes sensu Li. Taxodiaceae comprise five separate lineages. Chamaecyparis nootkatensis falls within Cupressus, clustering with a robust clade of New World species. Libocedrus Florin is paraphyletic and should incorporate Pilgerodendron. Evolution of several characters of wood and leaf anatomy and chemistry is discussed in light of this estimate of the phylogeny; numerous parallelisms are apparent. A new infrafamilial classification is proposed in which seven subfamilies are recognized: Callitroideae Saxton, Athrotaxidoideae Quinn, Cunninghamioideae (Sieb. & Zucc.) Quinn, Cupressoideae Rich. ex Sweet, Sequoioideae (Luerss.) Quinn, Taiwanioideae (Hayata) Quinn, Taxodioideae Endl. ex K. Koch. The rbcL sequence for Taxodium distichum is corrected, and the implications for a previously published estimate of the minimum rate of divergence of the gene since the Miocene are highlighted.