Abstract Background Echinoidea is a clade of marine animals including sea urchins, heart urchins, sand dollars and sea biscuits. Found in benthic habitats across all latitudes, echinoids are key components of marine communities such as coral reefs and kelp forests. A little over 1,000 species inhabit the oceans today, a diversity that traces its roots back at least to the Permian. Although much effort has been devoted to elucidating the echinoid tree of life using a variety of morphological data, molecular attempts have relied on only a handful of genes. Both of these approaches have had limited success at resolving the deepest nodes of the tree, and their disagreement over the positions of a number of clades remains unresolved. Results We performed de novo sequencing and assembly of 17 transcriptomes to complement available genomic resources of sea urchins and produce the first phylogenomic analysis of the clade. Multiple methods of probabilistic inference recovered identical topologies, with virtually all nodes showing maximum support. In contrast, the coalescent-based method ASTRAL-II resolved one node differently, a result apparently driven by gene tree error induced by evolutionary rate heterogeneity. Regardless of the method employed, our phylogenetic structure deviates from the currently accepted classification of echinoids, with neither Acroechinoidea (all euechinoids except echinothurioids), nor Clypeasteroida (sand dollars and sea biscuits) being monophyletic as currently defined. We demonstrate the strength and distribution of phylogenetic signal throughout the genome for novel resolutions of these lineages and rule out systematic biases as possible explanations. Conclusions Our investigation substantially augments the molecular resources available for sea urchins, providing the first transcriptomes for many of its main lineages. Using this expanded genomic dataset, we resolve the position of several clades in agreement with early molecular analyses but in disagreement with morphological data. Our efforts settle multiple phylogenetic uncertainties, including the position of the enigmatic deep-sea echinothurioids and the identity of the sister clade to sand dollars. We offer a detailed assessment of evolutionary scenarios that could reconcile our findings with morphological evidence, opening up new lines of research into the development and evolutionary history of this ancient clade.