To circumscribe the moss family Amblystegiaceae, we performed a broad-scale analysis of trnL-trnF spacer sequence data for 168 species of the Hypnales and 11 species of the Hookeriales and additional analyses of trnL-trnF and atpB-rbcL (chloroplast DNA), one nuclear region, the internal transcribed spacers of 18S-26S rDNA, and 68 morphological characters for a reduced data set of 54 species of Hypnales. The traditionally circumscribed Amblystegiaceae are polyphyletic and include the Amblystegiaceae s. str. and the Calliergonaceae fam. nov., plus several taxa closely related to other Hypnalean families. Generic relationships within the redefined Amblystegiaceae were investigated by analyzing data from the three DNA regions and morphology as used in the broader analysis. Reconstruction of morphological evolution was evaluated using maximum-parsimony and maximum-likelihood. Numerous independent character-state transitions implied by the phylogeny suggest that morphological characters that have traditionally been used to delineate the Amblystegiaceae are homoplastic. Sporophytic traits, which are generally given primacy over gametophytic traits in moss classification, are more labile than previously thought, and many characters that are related to sporophyte specializations are strongly correlated with habitat conditions. The evolution of several gametophyte features previously thought to be reliable for delineating the family are also strongly correlated with habitat. These observations help to explain the instability of the Amblystegiaceae in previous taxonomic and phylogenetic analyses based on morphology.