Outcrossing and self-fertilization are fundamental strategies of sexual reproduction, each with different evolutionary costs and benefits. Self-fertilization is thought to be an evolutionary “dead-end” strategy, beneficial in the short term but costly in the long term, resulting in self-fertilizing species that occupy only the tips of phylogenetic trees. Here, we use volvocine green algae to investigate the evolution of self-fertilization. We use ancestral-state reconstructions to show that self-fertilization has repeatedly evolved from outcrossing ancestors and that multiple reversals from selfing to outcrossing have occurred. We use three phylogenetic metrics to show that self-fertilization is not restricted to the tips of the phylogenetic tree, a finding inconsistent with the view of self-fertilization as a dead-end strategy. We also find no evidence for higher extinction rates or lower speciation rates in selfing lineages. We find that self-fertilizing species have significantly larger colonies than outcrossing species, suggesting the benefits of selfing may counteract the costs of increased size. We speculate that our macroevolutionary results on self-fertilization (i.e. non-tippy distribution, no decreased diversification rates) may be explained by the haploid-dominant life cycle that occurs in volvocine algae, which may alter the costs and benefits of selfing.