The squirrel family, Sciuridae, is one of the largest and most widely dispersed families of mammals. In spite of the wide distribution and conspicuousness of this group, phylogenetic relationships remain poorly understood. We used DNA sequence data from the mitochondrial cytochrome b gene of 114 species in 21 genera to infer phylogenetic relationships among sciurids based on maximum parsimony and Bayesian phylogenetic methods. Although we evaluated more complex alternative models of nucleotide substitution to reconstruct Bayesian phylogenies, none provided a better fit to the data than the GTR+G+I model. We used the reconstructed phylogenies to evaluate the current taxonomy of the Sciuridae. At essentially all levels of relationships, we found the phylogeny of squirrels to be in substantial conflict with the current taxonomy. At the highest level, the flying squirrels do not represent a basal divergence, and the current division of Sciuridae into two subfamilies is therefore not phylogenetically informative. At the tribal level, the Neotropical pygmy squirrel, Sciurillus, represents a basal divergence and is not closely related to the other members of the tribe Sciurini. At the genus level, the sciurine genus Sciurus is paraphyletic with respect to the dwarf squirrels (Microsciurus), and the Holarctic ground squirrels (Spermophilus) are paraphyletic with respect to antelope squirrels (Ammospermophilus), prairie dogs (Cynomys), and marmots (Marmota). Finally, several species of chipmunks and Holarctic ground squirrels do not appear monophyletic, indicating a need for reevaluation of alpha taxonomy.