A phylogenetic study of the percoid family Gerreidae at both lower and higher taxonomic levels is presented based on DNA sequence data of four genes: mitochondrial 12S and 16S, and nuclear genes rhodopsin and recombination activating gene 1 (RAG1). The taxonomic sampling includes four genera of Gerreidae from the western Atlantic, 39 additional percomorph representatives and two outgroups. Phylogenetic results confirm the monophyly of the Gerreidae and suggest that the family is divided into two sub-groups (Diapterus auratus plus Eugerres plumieri and Eucinostomus gula plus Gerres cinereus), which correspond to two previously defined taxonomic assemblages characterized by the shape of the preoperculum. Gerreids are placed at an intermediate position in the percomorph tree between two basal clades (L and Q) and a terminal clade N (grouping tetraodontiforms, acanthuroids, lophiiforms, caproids and several percoids). In addition, topology tests indicate that two traditional assemblages, Labroidei (seven representatives sampled) and Percoidei (22 representatives sampled) are not natural groups. Labrids and scarids appear to be more closely related to gerreids and to the members of clade N than to any other basal percomorphs, including their labroid ‘allies’ sampled in this study, Embiotocidae, Pomacentridae and Cichlidae, which are all nested within clade Q that also includes atherinomorphs, mugiliforms and Chandidae. The percoid taxa included in this study are widely distributed among various percomorph lineages. The percomorph phylogeny obtained is highly congruent with results from recent molecular studies.