Systems of N identical phase oscillators with global sinusoidal coupling are known to display low-dimensional dynamics. Although this phenomenon was first observed about 20 years ago, its underlying cause has remained a puzzle. Here we expose the structure working behind the scenes of these systems by proving that the governing equations are generated by the action of the Mobius group, a three-parameter subgroup of fractional linear transformations that map the unit disk to itself. When there are no auxiliary state variables, the group action partitions the N-dimensional state space into three-dimensional invariant manifolds (the group orbits). The N-3 constants of motion associated with this foliation are the N-3 functionally independent cross ratios of the oscillator phases. No further reduction is possible, in general; numerical experiments on models of Josephson junction arrays suggest that the invariant manifolds often contain three-dimensional regions of neutrally stable chaos.