The volvocine algae, which include the single-celled species Chlamydomonas reinhardtii and the colonial species Volvox carteri, serve as a model in which to study the evolution of multicellularity and cellular differentiation. Studies reconstructing the history of this group have by and large relied on datasets of one to a few genes for phylogenetic inference and ancestral character state reconstruction. As a result, volvocine phylogenies lack concordance depending on the number and/or type of genes (i.e., chloroplast vs nuclear) chosen for phylogenetic inference. While multiple studies suggest that multicellularity evolved only once in the volvocine algae, that each of its three colonial families is monophyletic, and that there have been at least three independent origins of cellular differentiation in the group, other studies call into question one or more of these conclusions. An accurate assessment of the evolutionary history of the volvocine algae requires inference of a more robust phylogeny. We performed RNA sequencing (RNA-seq) on 55 strains representing 47 volvocine algal species and obtained similar data from curated databases on 13 additional strains. We then compiled a dataset consisting of transcripts for 40 single-copy, protein-coding, nuclear genes, and subjected the predicted amino acid sequences of these genes to maximum likelihood, Bayesian inference, and coalescent-based analyses. These analyses show that multicellularity independently evolved at least twice in the volvocine algae and that the colonial family Goniaceae is not monophyletic. Our data further indicate that cellular differentiation arose independently at least four, and possibly as many as six times, within the volvocine algae. Altogether, our results demonstrate that multicellularity and cellular differentiation are evolutionarily labile in the volvocine algae, affirming the importance of this group as a model system for the study of major transitions in the history of life.