With approximately 3000 marine species, Tunicata represents the most disparate subtaxon of Chordata. Molecular phylogenetic studies support Tunicata as sister taxon to Craniota, rendering it pivotal to understanding craniate evolution. Although successively more molecular data have become available to resolve internal tunicate phylogenetic relationships, phenotypic data have not been utilized consistently. Herein these shortcomings are addressed by cladistically analyzing 117 phenotypic characters for 49 tunicate species comprising all higher tunicate taxa, and five craniate and cephalochordate outgroup species. In addition, a combined analysis of the phenotypic characters with 18S rDNA-sequence data is performed in 32 OTUs. The analysis of the combined data is congruent with published molecular analyses. Successively up-weighting phenotypic characters indicates that phenotypic data contribute disproportionally more to the resulting phylogenetic hypothesis. The strict consensus tree from the analysis of the phenotypic characters as well as the single most parsimonious tree found in the analysis of the combined dataset recover monophyletic Appendicularia as sister taxon to the remaining tunicate taxa. Thus, both datasets support the hypothesis that the last common ancestor of Tunicata was free-living and that ascidian sessility is a derived trait within Tunicata. "Thaliacea" is found to be paraphyletic with Pyrosomatida as sister taxon to monophyletic Ascidiacea and the relationship between Doliolida and Salpida is unresolved in the analysis of morphological characters; however, the analysis of the combined data reconstructs Thaliacea as monophyletic nested within paraphyletic "Ascidiacea". Therefore, both datasets differ in the interpretation of the evolution of the complex holoplanktonic life history of thaliacean taxa. According to the phenotypic data, this evolution occurred in the plankton, whereas from the combined dataset a secondary transition into the plankton from a sessile ascidian is inferred. Besides these major differences, both analyses are in accord on many phylogenetic groupings, although both phylogenetic reconstructions invoke a high degree of homoplasy. In conclusion, this study represents the first serious attempt to utilize the potential phylogenetic information present in phenotypic characters to elucidate the inter-relationships of this diverse marine taxon in a consistent cladistic framework.