We used mitochondrial DNA sequences of 12S and 16S ribosomal RNA genes to reconstruct phylogenetic relationships of the nine species of South American aquatic hylids known as paradoxical frogs. Pseudis minuta and P. cardosoi form the sister-group to a clade comprising Lysapsus and the remaining Pseudis. We suggest the resurrection of Podonectes, including P. minutus and P. cardosoi, to avoid the nonmonophyly of Pseudis. Some doubt is cast on the species status of P. cardosoi. Lysapsus limellum, P. bolbodactyla, and P. paradoxa each may comprise more than one species, but lack of comprehensive geographic and morphological appraisals precludes taxonomic changes. Biogeographic implications of the phylogeny are discussed. The correlation between hydrographic basins and Pseudis species is not fully supported, and a recent contact between Amazon populations in eastern Bolivia and western Brazil (Rondônia) and Paraná basin populations in the Pantanal is suggested. A dispersal-vicariance analysis showed that major diversification of Pseudis and Lysapsus species occurred in the Brazilian Shield, and that the presence of P. paradoxa and L. limellum in the Amazon and Paraná basins is due to recent dispersals. Evidence suggests a vicariant event, most likely caused by Miocene marine introgressions, as the cause for the restricted distribution of L. laevis in the Guiana Shield.