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The most robust previously published phylogeny for the overall structure of the grass family (Poaceae) shows three early diverging lineages and two major derived clades, the BEP clade and the PACCAD clade (Grass Phylogeny Working Group 2001). A few key taxa were incompletely sampled, however, and support for the BEP clade was moderate at best and relationships among the major lineages within the PACCAD clade remained unresolved. In addition, recent studies indicated that the sister group to Poaceae may be Joinvilleaceae and/or Ecdeiocoleaceae, the latter of which were not previously sampled. In this study, missing structural data were determined and analyzed as well as sequence data for ndhF and rbcL, the two most complete plastid sequence data sets. Sampling was increased with a particular focus on key taxa such as Danthoniopsis, Eriachne, Micraira, and Streptogyna and a representative of the outgroup, Ecdeiocoleaceae. A total of 61 ingroup and two outgroup taxa were analyzed using maximum parsimony for total data, and maximum parsimony, Bayesian inference, and neighbor joining for the molecular data. A strongly supported clade of ((Eriachneae, Isachne) Micraira) was recovered as a sister subfamily to Arundinoideae and excluded from Panicoideae. Arundinaria was strongly united with Bambusoideae. The position of Streptogyna was weakly supported among Ehrhartoideae, and is still unresolved. An outgroup effect on ingroup topology was observed, demonstrating that highly divergent outgroups may unpredictably alter ingroup relationships.