Despite extensive studies on the ecology and evolution of the freshwater microcrustacean Daphnia, there is little understanding of the evolutionary history of the genus. Past attempts at reconstructing phylogenetic relationships among Daphnia species have been highly controversial, mainly because of the poor taxonomy of the genus. However, following a revised taxonomy of the daphniid fauna of North America, we conducted a comprehensive appraisal of systematic relationships within the genus through the analysis of sequence diversity in 503 b.p. of the 12S rRNA gene of the mtDNA. The large sequence divergence among its 34 North American members indicates that the genus Daphnia originated during the Mesozoic, even though many lineages exhibit extreme morphological stasis. Results from both cladistic and phenetic analyses indicate the presence of three subgenera comprised of 15 species complexes. Only four of these lineages have shown active speciation over the past 3 Ma, suggesting that cladogenesis in the genus has been constrained. Our study also reveals that interspecific hybridization occurs between taxa which show very large sequence divergence (up to 14%), suggesting that reproductive isolation within the genus evolves slowly.