A phylogenetic analysis of the small subunit ribosomal RNA (16S-like rRNA) coding region from Hexamita inflata demonstrates that parasitism alone cannot explain early diverging eukaryotic lineages. Parasitic and free-living diplomonads, as well as trichomonads and microsporidia, diverge at the base of the eukaryotic tree. The relative branching order of diplomonads, trichomonads and microsporidia is influenced by outlying prokaryotic taxa with different G+C compositions in their rRNA coding regions. The high G+C prokaryotes position Giardia lamblia at the base of the eukaryotic tree but split diplomonads into a paraphyletic group. When the outlying groups are restricted to rRNAs with nominal G+C compositions, diplomonads form a monophyletic group that diverged after the microsporidia and trichomonads. This unstable branching pattern correlates with unusual nucleotide compositions in the rRNAs of G. lamblia (75% G+C) and Vairimorpha necatrix (35% G+C). In contrast, the 51% G+C composition of the H. inflata rRNA is typical of other eukaryotic rRNAs. Its divergence after trichomonads is strongly supported by bootstrap replicates in distance analyses that do not include G. lamblia. Because of a low G+C composition in its rRNA coding region, the phylogenetic placement of V. necatrix is uncertain and the identity of the deepest branching eukaryotic lineage is ambiguous.