Molecular phylogenies challenge the view that bats belong to the superordinal group Archonta, which also includes primates, tree shrews, and flying lemurs. Some molecular studies also challenge microbat monophyly and instead support an alliance between megabats and representative rhinolophoid microbats from the families Rhinolophidae (horseshoe bats, Old World leaf-nosed bats) and Megadermatidae (false vampire bats). Another molecular study ostensibly contradicts these results and supports traditional microbat monophyly, inclusive of representative rhinolophoids from the family Nycteridae (slit-faced bats). Resolution of the microbat paraphyly/monophyly issue is essential for reconstructing the temporal sequence and deployment of morphological character state changes associated with flight and echolocation in bats. If microbats are paraphyletic, then laryngeal echolocation either evolved more than once in different microbats or was lost in megabats after evolving in the ancestor of all living bats. To examine these issues, we used a 7.1-kb nuclear data set for nine outgroups and twenty bats, including representatives of all rhinolophoid families. Phylogenetic analyses and statistical tests rejected both Archonta and microbat monophyly. Instead, bats are in the superorder Laurasiatheria and microbats are paraphyletic. Further, the superfamily Rhinolophoidea is polyphyletic. The rhinolophoid families Rhinolophidae and Megadermatidae belong to the suborder Yinpterochiroptera along with rhinopomatids and megabats. The rhinolophoid family Nycteridae belongs to the suborder Yangochiroptera along with vespertilionoids, noctilionoids, and emballonuroids. These results resolve the apparent conflict between previous molecular studies that sampled different rhinolophoid families. An important implication of rhinolophoid polyphyly is independent evolution of key anatomical innovations associated with the nasal-emission of echolocation pulses.