Red algae comprise an anciently diverged, species-rich phylum with morphologies that span unicells to large seaweeds. Here, leveraging a rich red algal genome and transcriptome dataset, we used 298 single-copy orthologous nuclear genes from 15 red algal species to erect a robust multi-gene phylogeny of Rhodophyta. This tree places red seaweeds (Bangiophyceae and Florideophyceae) at the base of the mesophilic red algae with the remaining non-seaweed mesophilic lineages forming a well-supported sister group. The early divergence of seaweeds contrasts with the evolution of multicellular land plants and brown algae that are nested among multiple, unicellular or filamentous sister lineages. Using this novel perspective on red algal evolution, we studied the evolution of the pathways for isoprenoid biosynthesis. This analysis revealed losses of the mevalonate pathway on at least three separate occasions in lineages that contain Cyanidioschyzon, Porphyridium, and Chondrus. Our results establish a framework for in-depth studies of the origin and evolution of genes and metabolic pathways in Rhodophyta.