The order Atheriniformes (silversides, rainbowfishes, and blue-eyes) is a globally distributed group of fishes with frequent evolutionary transitions between marine and freshwater ecosystems. However, understanding the tempo and mode of these transitions has been hampered by poor phylogenetic resolution and limited taxonomic sampling, particularly within the suborder Atherinoidei. We generated a phylogenomic dataset of 1,100 exon loci for 150 species to resolve interfamilial relationships and reconstruct the group’s biogeographic history. We were also able to incorporate a large number of existing GenBank sequences, producing a phylogeny with 265 species sampled for at least some genetic data (67% of known species diversity). While the New World suborder Atherinopsidae is well-resolved, we found that the family Atherinidae is polyphyletic across all analyses. We propose a revised classification that restricts Atherinidae to the genus Atherina and recognizes Atherinomoridae and Craterocephalidae as separate families. Our biogeographic inferences using explicit geographic areas suggests more frequent marine-to-freshwater transitions than previously inferred with simplified binary (marine vs. freshwater) coding, and uncover habitat transitions where marine ancestors may have gone extinct. These results highlight how explicit geographic modeling can uncover marine ancestry erased by extinction, providing a robust phylogenetic framework for future evolutionary studies of Atheriniformes.