A newly compiled data set of nearly complete sequences of the large subunit of the nuclear ribosome (LSU or 28S) sampled from 31 diverse medusozoans greatly clarifies the phylogenetic history of Cnidaria. These data have substantial power to discern among many of the competing hypotheses of relationship derived from prior work. Moreover, LSU data provide strong support at key nodes that were equivocal based on other molecular markers. Combining LSU sequences with those of the small subunit of the nuclear ribosome (SSU or 18S), we present a detailed working hypothesis of medusozoan relationships and discuss character evolution within this diverse clade. Stauromedusae, comprising the benthic, so-called stalked jellyfish, appears to be the sister group of all other medusozoans, implying that the free-swimming medusa stage, the motor nerve net, and statocysts of ecto-endodermal origin are features derived within Medusozoa. Cubozoans, which have had uncertain phylogenetic affinities since the elucidation of their life cycles, form a clade-named Acraspeda-with the scyphozoan groups Coronatae, Rhizostomeae, and Semaeostomeae. The polyps of both cubozoans and hydrozoans appear to be secondarily simplified. Hydrozoa is comprised by two well-supported clades, Trachylina and Hydroidolina. The position of Limnomedusae within Trachylina indicates that the ancestral hydrozoan had a biphasic life cycle and that the medusa was formed via an entocodon. Recently hypothesized homologies between the entocodon and bilaterian mesoderm are therefore suspect. Laingiomedusae, which has often been viewed as a close ally of the trachyline group Narcomedusae, is instead shown to be unambiguously a member of Hydroidolina. The important model organisms of the Hydra species complex are part of a clade, Aplanulata, with other hydrozoans possessing direct development not involving a ciliated planula stage. Finally, applying phylogenetic mixture models to our data proved to be of little additional value over a more traditional phylogenetic approach involving explicit hypothesis testing and bootstrap analyses under multiple optimality criteria.