Chaetonotidae is the largest family within Gastrotricha with almost 400 nominal species, represented in both freshwater and marine habitats. The group is probably non-monophyletic and suffers from a troubled taxonomy. Current classification is to a great extent based on shape and distribution of cuticular structures, characters that are highly variable. We present the most densely sampled molecular study so far where 17 out of 31 genera belonging to Chaetonotida are represented. Bayesian and maximum likelihood approaches based on 18S rDNA, 28S rDNA and COI mtDNA are used to reconstruct relationships within Chaetonotidae. The use of cuticular structures for supra-specific classification within the group is evaluated and the question of dispersal between marine and freshwater habitats is addressed. Moreover the subgeneric classification of Chaetonotus is tested in a phylogenetic context. Our results show high support for a clade containing Dasydytidae nested within Chaetonotidae. Within this clade only 3 genera are monophyletic following current classification. Genera containing both marine and freshwater species never form monophyletic clades and group with other species according to habitat. Marine members of Aspidiophorus appear to be the sister group of all other Chaetonotidae and Dasydytidae, indicating a marine origin of the clade. Halichaetonotus and marine Heterolepidoderma form a monophyletic group in a sister group relationship to freshwater species, pointing towards a secondary invasion to marine environments of these taxa. Our study shows the problems of current classification based on cuticular structures, characters that show homoplasy for deeper relationships.