Some of the most interesting and enigmatic cnidarians are classified within the hydrozoan subclass Trachylina. Despite being relatively depauperate in species richness, the clade contains four taxa typically accorded ordinal status: Actinulida, Limnomedusae, Narcomedusae and Trachymedusae. We bring molecular data (mitochondrial 16S and nuclear small and large subunit ribosomal genes) to bear on the question of phylogenetic relationships within Trachylina. Surprisingly, we find that a diminutive polyp form, Microhydrula limopsicola (classified within Limnomedusae) is actually a previously unknown life stage of a species of Stauromedusae. Our data confirm that the interstitial form Halammohydra sp. (Actinulida) is derived from holopelagic direct developing ancestors, likely within the trachymedusan family Rhopalonematidae. Trachymedusae is shown to be diphyletic, suggesting that the polyp stage has been lost independently at least two times within trachyline evolution. Narcomedusae is supported as a monophyletic group likely also arising from trachymedusan ancestors. Finally, some data, albeit limited, suggest that some trachyline species names refer to cryptic species that have yet to be sorted taxonomically.