Caddisflies (Trichoptera) are among the most diverse groups of freshwater animals with more than 16 000 described species. They play a fundamental role in freshwater ecology and environmental engineering in streams, rivers and lakes. Because of this, they are frequently used as indicator organisms in biomonitoring programmes. Despite their importance, key questions concerning the evolutionary history of caddisflies, such as the timing and origin of larval case making, remain unanswered owing to the lack of a well-resolved phylogeny. Here, we estimated a phylogenetic tree using a combination of transcriptomes and targeted enrichment data for 207 species, representing 48 of 52 extant families and 174 genera. We calibrated and dated the tree with 33 carefully selected fossils. The first caddisflies originated approximately 295 million years ago in the Permian, and major suborders began to diversify in the Triassic. Furthermore, we show that portable case making evolved in three separate lineages, and shifts in diversification occurred in concert with key evolutionary innovations beyond case making.