A phylogenetic analysis of morphological data from modern pterobranch hemichordates (Cephalodiscus, Rhabdopleura) and representatives of each of the major graptolite orders reveals that Rhabdopleura nests among the benthic, encrusting graptolite taxa as it shares all of the synapomorphies that unite the graptolites. Therefore, rhabdopleurids can be regarded as extant members of the Subclass Graptolithina (Class Pterobranchia). Combined with the results of previous molecular phylogenetic studies of extant deuterostomes, these results also suggest that the Graptolithina is a sister taxon to the Subclass Cephalodiscida. The Graptolithina, as an important component of Early–Middle Palaeozoic biotas, provide data critical to our understanding of early deuterostome phylogeny. This result allows one to infer the zooid morphology, mechanics of colony growth and palaeobiology of fossil graptolites in direct relation to the living members of the clade. The Subdivision Graptoloida (nom. transl.), which are all planktic graptolites, is well supported in this analysis. In addition, we recognize the clade Eugraptolithina (nov.). This clade comprises the Graptoloida and all of the other common and well-known graptolites of the distinctive Palaeozoic fauna. Most of the graptolites traditionally regarded as tuboids and dendroids appear to be paraphyletic groups within the Eugraptolithina; however, Epigraptus is probably not a member of this clade. The Eugraptolithina appear to be derived from an encrusting, Rhabdopleura-like species, but the available information is insufficient to resolve the phylogeny of basal graptolites. The phylogenetic position of Mastigograptus and the status of the Dithecoidea and Mastigograptida also remain unresolved. □ Biodiversity, Cambrian, Hemichordata, Deuterostomia, Ordovician.