Morphological and DNA sequence data has been used to propose hypotheses of relationships within the Characiformes with minimal comparative discussion of causes underpinning the major intraordinal diversification patterns. We explore potential primary morphological factors controlling the early diversification process in some Neotropical characiforms as the first step to identifying factors contributing to the pronounced intraordinal morphological and species diversity. A phylogenetic reconstruction based on 16S rDNA (mitochondrial) and 18S rDNA (nuclear) genes provided the framework for the identification of the main morphological differences among the Acestrorhynchidae, Anostomidae, Characidae, Ctenoluciidae, Curimatidae, Cynodontidae, Gasteropelecidae, Prochilodontidae and Serrasalmidae. Results indicate an initial split into two major groupings: (i) species with long dorsal-fin bases relative to the size of other fins (Curimatidae, Prochilodontidae, Anostomidae, Serrasalmidae) which primarily inhabit lakes, swamps, and rivers (lineage I); and (ii) species with short dorsal-fin bases (Acestrorhynchidae, Gasteropelecidae, Characidae) which primarily inhabit creeks and streams (lineage II). The second diversification stage in lineage I involved substantial morphological diversification associated with trophic niche differences among the monophyletic families which range from detritivores to large item predators. Nonmonophyly of the Characidae complicated within lineage II analyzes but yielded groupings based on differences in pectoral and anal fin sizes correlated with life style differences.