Background: The extant squamates (>9400 known species of lizards and snakes) are one of the most diverse and conspicuous radiations of terrestrial vertebrates, but no studies have attempted to reconstruct a phylogeny for the group with large-scale taxon sampling. Such an estimate is invaluable for comparative evolutionary studies, and to clarify their taxonomy. Here, we present the first large-scale phylogenetic estimate for Squamata. Results: The estimated phylogeny contains 4161 species representing all currently recognized families and subfamilies. The analysis is based on up to 12896 base pairs of sequence data per species (average = 2497 bp) from 12 genes, including seven nuclear loci (BDNF, c-mos, NT3, PDC, R35, RAG-1, and RAG-2), and five mitochondrial genes (12S, 16S, cytochrome b, ND2, and ND4). The tree provides important confirmation for recent estimates of higher-level squamate phylogeny based on molecular data (but with more limited taxon sampling), estimates that are very different from previous morphology-based hypotheses. The tree also includes many relationships that differ from previous molecular estimates and many that differ from traditional taxonomy. Conclusions: We present a new large-scale phylogeny of squamate reptiles that should be a valuable resource for future comparative studies. We also present a revised classification of squamates at the family and subfamily level to bring the taxonomy more in line with the new phylogenetic hypothesis. This classification includes new, resurrected, and modified subfamilies within gymnophthalmid and scincid lizards and boid, colubrid, and lamprophiid snakes.