Squamate reptiles (snakes, lizards, and amphisbaenians) serve as model systems for evolutionary studies of a variety of morphological and behavioral traits, and phylogeny is crucial to many generalizations derived from such studies. Specifically, the traditional dichotomy between Iguania ( anoles, iguanas, chameleons, etc.) and Scleroglossa ( skinks, geckos, snakes, etc.) has been correlated with major evolutionary shifts within Squamata. We present a molecular phylogenetic study of 69 squamate species using approximately 4600 ( 2876 parsimony-informative) base pairs ( bp) of DNA sequence data from the nuclear genes RAG-1 (-2750 bp) and c-mos (-360 bp) and the mitochondrial ND2 region (-1500 bp), sampling all major clades and most major subclades. Under our hypothesis, species previously placed in Iguania, Anguimorpha, and almost all recognized squamate families form strongly supported monophyletic groups. However, species previously placed in Scleroglossa, Varanoidea, and several other higher taxa do not form monophyletic groups. Iguania, the traditional sister group of Scleroglossa, is actually highly nested within Scleroglossa. This unconventional rooting does not seem to be due to long-branch attraction, base composition biases among taxa, or convergence caused by similar selective forces acting on nonsister taxa. Studies of functional tongue morphology and feeding mode have contrasted the similar states found in Sphenodon ( the nearest outgroup to squamates) and Iguania with those of Scleroglossa, but our findings suggest that similar states in Sphenodon and Iguania result from homoplasy. Snakes, amphisbaenians, and dibamid lizards, limbless forms whose phylogenetic positions historically have been impossible to place with confidence, are not grouped together and appear to have evolved this condition independently. Amphisbaenians are the sister group of lacertids, and dibamid lizards diverged early in squamate evolutionary history. Snakes are grouped with iguanians, lacertiforms, and anguimorphs, but are not nested within anguimorphs.