Molecular and morphological data have important roles in illuminating evolutionary history. DNA data often yield well resolved phylogenies for living taxa, but are generally unattainable for fossils. A distinct advantage of morphology is that some types of morphological data may be collected for extinct and extant taxa. Fossils provide a unique window on evolutionary history and may preserve combinations of primitive and derived characters that are not found in extant taxa. Given their unique character complexes, fossils are critical in documenting sequences of character transformation over geologic time and may elucidate otherwise ambiguous patterns of evolution that are not revealed by molecular data alone. Here, we employ a methodological approach that allows for the integration of molecular and paleontological data in deciphering one of the most innovative features in the evolutionary history of mammals-laryngeal echolocation in bats. Molecular data alone, including an expanded data set that includes new sequences for the A2AB gene, suggest that microbats are paraphyletic but do not resolve whether laryngeal echolocation evolved independently in different microbat lineages or evolved in the common ancestor of bats and was subsequently lost in megabats. When scaffolds from molecular phylogenies are incorporated into parsimony analyses of morphological characters, including morphological characters for the Eocene taxa Icaronycteris, Archaeonycteris, Hassianycteris, and Palaeochiropteryx, the resulting trees suggest that laryngeal echolocation evolved in the common ancestor of fossil and extant bats and was subsequently lost in megabats. Molecular dating suggests that crown-group bats last shared a common ancestor 52 to 54 million years ago.