The orchid subtribe Eulophiinae comprises nine genera and an estimated 270 species, of which 80% are restricted to the Afro-Madagascan region. Using molecular data (and sampling 122 taxa), we present here the first complete generic level phylogeny of the subtribe, and clarify generic delimitation within this group. The Eulophiinae is unusual among Epidendroid orchids, by being dominated by terrestrial plants rather than epiphytes and becoming established in varied habitats, from seasonal swamps to dry grasslands, rocky outcrops and dry forests, to arid zones that extend onto the Arabian Peninsula. Using a combination of macro-ecological and phylogenetic data, we find evidence for multiple switches in photosynthetic pathway (from C3 to CAM), and suggest that these key innovations may explain the apparent evolutionary success of these orchids in arid/ semi-arid environments.