Armadillos, anteaters, and sloths (Order Xenarthra) comprise 1 of the 4 major clades of placental mammals. Isolated in South America from the other continental landmasses, xenarthrans diverged over a period of about 65 Myr, leaving more than 200 extinct genera and only 31 living species. The presence of both ancestral and highly derived anatomical features has made morphoanatomical analyses of the xenarthran evolutionary history difficult, and previous molecular analyses failed to resolve the relationships within armadillo subfamilies. We investigated the presence/absence patterns of retroposons from ∼7,400 genomic loci, identifying 35 phylogenetically informative elements and an additional 39 informative rare genomic changes (RGCs). DAS-short interspersed elements (SINEs), previously described only in the Dasypus novemcinctus genome, were found in all living armadillo genera, including the previously unsampled Chlamyphorus, but were noticeably absent in sloths. The presence/absence patterns of the phylogenetically informative retroposed elements and other RGCs were then compared with data from the DNA sequences of the more than 12-kb flanking regions of these retroposons. Together, these data provide the first fully resolved genus tree of xenarthrans. Interestingly, multiple evidence supports the grouping of Chaetophractus and Zaedyus as a sister group to Euphractus within Euphractinae, an association that was not previously demonstrated. Also, flanking sequence analyses favor a close phylogenetic relationship between Cabassous and Tolypeutes within Tolypeutinae. Finally, the phylogenetic position of the subfamily Chlamyphorinae is resolved by the noncoding sequence data set as the sister group of Tolypeutinae. The data provide a stable phylogenetic framework for further evolutionary investigations of xenarthrans and important information for defining conservation priorities to save the diversity of one of the most curious groups of mammals.