Angiosperms have dominated the Earth's vegetation since the mid-Cretaceous (90 million years ago), providing much of our food, fibre, medicine and timber, yet their origin and early evolution have remained enigmatic for over a century. One part of the enigma lies in the difficulty of identifying the earliest angiosperms; the other involves the uncertainty regarding the sister group of angiosperms among extant and fossil gymnosperms. Here we report a phylogenetic analysis of DNA sequences of five mitochondrial, plastid and nuclear genes (total aligned length 8,733 base pairs), from all basal angiosperm and gymnosperm lineages (105 species, 103 genera and 63 families). Our study demonstrates that Amborella, Nymphaeales and Illiciales-Trimeniaceae-Austrobaileya represent the first stage of angiosperm evolution, with Amborella being sister to all other angiosperms. We also show that Gnetales are related to the conifers and are not sister to the angiosperms, thus refuting the Anthophyte Hypothesis. These results have far-reaching implications for our understanding of diversification, adaptation, genome evolution and development of the angiosperms.