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Although ground squirrels (Spermophilus) and prairie dogs (Cynomys) are among the most intensively studied groups of mammals with respect to their ecology and behavior, a well-resolved phylogeny has not been available to provide a framework for comparative and historical analyses. We used complete mitochondrial cytochrome b sequences to construct a phylogeny that includes all 43 currently recognized species in the two genera, as well as representatives of two closely related genera (Marmota and Ammospermophilus). In addition, divergence times for ground squirrel lineages were estimated using Bayesian techniques that do not assume a molecular clock. All methods of phylogenetic analysis recovered the same major clades, and showed the genus Spermophilus to be paraphyletic with respect to both Marmota and Cynomys. Not only is the phylogeny at odds with previous hypotheses of ground squirrel relationships, but it suggests that convergence in morphology has been a common theme in ground squirrel evolution. A well-supported basal clade, including Ammospermophilus and two species in the subgenus Otospermophilus, diverged from all other ground squirrels an estimated 17.5 million years ago. Between 10 and 14 million years ago, a relatively rapid diversification gave rise to lineages leading to marmots and to several distinct groups of ground squirrels. The Eurasian ground squirrels diverged from their North American relatives during this period, far earlier than previously hypothesized. This period of diversification corresponded to warming climate and spread of grasslands in western North America and Eurasia. Close geographic proximity of related forms suggests that most species evolved in or near their current ranges.