Phylogenetic analyses were performed on concatenated data sets of 31 genes and 11,789 unambiguously alignable characters from 37 cyanobacterial and 35 chloroplast genomes. The plastid lineage emerged somewhat early in the cyanobacterial tree, at a time when Cyanobacteria were likely unicellular and restricted to freshwater ecosystems. Using relaxed molecular clocks and 22 age constraints spanning cyanobacterial and eukaryote nodes, the common ancestor to the photosynthetic eukaryotes was predicted to have also inhabited freshwater environments around the time that oxygen appeared in the atmosphere (2.0–2.3 Ga). Early diversifications within each of the three major plastid clades were also inferred to have occurred in freshwater environments, through the late Paleoproterozoic and into the middle Mesoproterozoic. The colonization of marine environments by photosynthetic eukaryotes may not have occurred until after the middle Mesoproterozoic (1.2–1.5 Ga). The evolutionary hypotheses proposed here predict that early photosynthetic eukaryotes may have never experienced the widespread anoxia or euxinia suggested to have characterized marine environments in the Paleoproterozoic to early Mesoproterozoic. It also proposes that earliest acritarchs (1.5–1.7 Ga) may have been produced by freshwater taxa. This study highlights how the early evolution of habitat preference in photosynthetic eukaryotes, along with Cyanobacteria, could have contributed to changing biogeochemical conditions on the early Earth.