The Anomura presents the greatest degree of morphological disparity in the decapod Crustacea, with body forms ranging from the symmetrical and asymmetrical hermit crabs to squat lobsters and king crabs. The phylogeny of the anomurans has been fraught with controversy. Recent debate has focused primarily on the phenomenon of carcinization, the evolution of crab-like form from a non-crab-like ancestor, focused chiefly on derivation of king crabs from asymmetrical hermit crabs--the "hermit to king" hypothesis. We show by phylogenetic analysis of five nuclear protein-coding gene sequences that hermit crabs have a single origin, but surprisingly, that almost all other major clades and body forms within the Anomura, are derived from within the hermit crabs. The crab-like form and squat lobster form have each evolved at least twice from separate symmetrical hermit crab ancestors. In each case, a carcinization trend can be posited via a transition series from the initial symmetrical long-tailed hermit crab form, through the intermediate squat lobster or asymmetrical hermit crab form, to the final crab-like form. Adaptation to dextral shell habitation evolved at least twice, once in an exclusively deep-water clade and once in the common ancestor of all other asymmetrical hermit crabs (from which king crabs are derived). These remarkable cases of parallelism suggest considerable phenotypic flexibility within the hermit crab ground plan, with a general tendency toward carcinization. Rather than having a separate origin from other major clades, hermit crabs have given rise to most other major anomuran body types.