The position of Xenacoelomorpha in the tree of life remains a major unresolved question in the study of deep animal relationships(1). Xenacoelomorpha, comprising Acoela, Nemertodermatida, and Xenoturbella, are bilaterally symmetrical marine worms that lack several features common to most other bilaterians, for example an anus, nephridia, and a circulatory system. Two conflicting hypotheses are under debate: Xenacoelomorpha is the sister group to all remaining Bilateria (= Nephrozoa, namely protostomes and deuterostomes)(2,3) or is a clade inside Deuterostomia(4). Thus, determining the phylogenetic position of this clade is pivotal for understanding the early evolution of bilaterian features, or as a case of drastic secondary loss of complexity. Here we show robust phylogenomic support for Xenacoelomorpha as the sister taxon of Nephrozoa. Our phylogenetic analyses, based on 11 novel xenacoelomorph transcriptomes and using different models of evolution under maximum likelihood and Bayesian inference analyses, strongly corroborate this result. Rigorous testing of 25 experimental data sets designed to exclude data partitions and taxa potentially prone to reconstruction biases indicates that long-branch attraction, saturation, and missing data do not influence these results. The sister group relationship between Nephrozoa and Xenacoelomorpha supported by our phylogenomic analyses implies that the last common ancestor of bilaterians was probably a benthic, ciliated acoelomate worm with a single opening into an epithelial gut, and that excretory organs, coelomic cavities, and nerve cords evolved after xenacoelomorphs separated from the stem lineage of Nephrozoa.