Kangaroos and their relatives (family Macropodidae) are divided into the subfamilies Macropodinae (kangaroos, wallabies, pademelons) and Potoroinae (rat-kangaroos, potoroos, bettongs). The musky rat-kangaroo, Hypsiprymnodon moschatus, is traditionally allied with other potoroines, based primarily on the basis of osteological characters and aspects of the female reproductive system. Unlike other macropodids, however, which are capable of bipedal hopping, Hypsiprymnodon is a quadrupedal bounder and lacks several derived features of the pes and tarsus that are presumably adaptations for bipedal hopping. Other derived features, such as a complex stomach, loss of P2 with the eruption of P3, and reduction of litter size to one, are also lacking in Hypsiprymnodon but occur in all other macropodids. Thus, available evidence suggests that Hypsiprymnodon either is part of a monophyletic Potoroinae or is a sister taxon to other living macropodids. To test these hypotheses, we sequenced 1,170 bp base pairs of the mitochondrial genome for 16 macropodids. Maximum parsimony, minimum evolution, maximum likelihood, and quartet puzzling all support the hypothesis that macropodines and potoroines are united to the exclusion of Hypsiprymnodon. This hypothesis implies that characters such as bipedal hopping evolved only once in macropodid evolution. Aside from Hypsiprymnodon, the remaining macropodids separate into the traditional Macropodinae and Potoroinae. Macropodines further separate into two clades: one containing the New Guinean forest wallabies Dorcopsis and Dorcopsulus, and one consisting of the genera Macropus, Setonix, Thylogale, Onychogalea, Wallabia, Dendrolagus, Peradorcas, and Lagorchestes. Among potoroines, there is moderate support for the association of Bettongia and Aepyprymnus to the exclusion of Potorous. Divergence times were estimated by using 12S ribosomal RNA transversions. At the base of the macropodid radiation, Hypsiprymnodon diverged from other macropodids approximately 45 million years ago. This estimate is comparable to divergence estimates among families of Australasian possums based on single-copy DNA hybridization and 12S rRNA transversions. Macropodines and potoroines, in turn, diverged approximately 30 million years ago. Among macropodines, Dorcopsis and Dorcopsulus separated from other taxa approximately 10 million years ago.