Alternanthera (Amaranthaceae) is a diverse genus (80–200 species) largely restricted to the American Tropics. With Pedersenia and Tidestromia, it makes up the ‘Alternantheroid clade’ in Gomphrenoideae. Parsimony and Bayesian analyses of nucleotide sequences of nuclear (ITS) and plastid (rpl16, trnL-F) and morphological characters identify that the capitate stigma of Alternanthera is a synapomorpy within the Alternantheroids. Within Alternanthera, two major clades were resolved, both of which were marked by otherwise homoplasious characters of the gynoecium: Clade A [99% jackknife (JK); 1.0 posterior probability (PP)] with nine species and Clade B (60% JK; 0.98 PP) with 22 species. Four subclades (B1–B4), strongly supported statistically, were identified in Clade B. Previous subgeneric classifications of Alternanthera appear artificial in light of our new molecular phylogenetic analyses. Most major lineages are congruently resolved by nuclear and plastid data but some incongruence between the nrITS and plastid phylogenetic trees suggests hybridization may have played a role in the rampant speciation in Alternanthera. Whereas C4 photosynthesis appears to have evolved in a single clade, the position of A. littoralis var. maritima (C3) in this clade may be explained by hybrid speciation rather than a reversal from C4 to C3. All C3–C4 intermediates belong to a different clade that also contains C3 species, but species limits, including the widely studied A. tenella, are unclear. The clade including A. tenella and A. halimifolia contains most of the species endemic to the Galápagos whereas A. nesiotes, also endemic to the islands, is nested among widespread American taxa. This suggests that the Galápagos radiation of Alternanthera may have arisen from at least two independent colonization events followed by a subsequent radiation in the former lineage. © 2012 The Linnean Society of London, Botanical Journal of the Linnean Society, 2012, 169, 493–517.