Squamate reptiles (lizards and snakes) are one of the most diverse groups of terrestrial vertebrates. Recent molecular analyses have suggested a very different squamate phylogeny relative to morphological hypotheses, but many aspects remain uncertain from molecular data. Here, we analyse higher-level squamate phylogeny with a molecular dataset of unprecedented size, including 161 squamate species for up to 44 nuclear genes each (33 717 base pairs), using both concatenated and species-tree methods for the first time. Our results strongly resolve most squamate relationships and reveal some surprising results. In contrast to most other recent studies, we find that dibamids and gekkotans are together the sister group to all other squamates. Remarkably, we find that the distinctive scolecophidians (blind snakes) are paraphyletic with respect to other snakes, suggesting that snakes were primitively burrowers and subsequently re-invaded surface habitats. Finally, we find that some clades remain poorly supported, despite our extensive data. Our analyses show that weakly supported clades are associated with relatively short branches for which individual genes often show conflicting relationships. These latter results have important implications for all studies that attempt to resolve phylogenies with large-scale phylogenomic datasets.