The rich fossil record of horses has made them a classic example of evolutionary processes. However, while the overall picture of equid evolution is well known, the details are surprisingly poorly understood, especially for the later Pliocene and Pleistocene, c. 3 million to 0.01 million years (Ma) ago, and nowhere more so than in the Americas. There is no consensus on the number of equid species or even the number of lineages that existed in these continents. Likewise, the origin of the endemic South American genus Hippidion is unresolved, as is the phylogenetic position of the “stilt-legged” horses of North America. Using ancient DNA sequences, we show that, in contrast to current models based on morphology and a recent genetic study, Hippidion was phylogenetically close to the caballine (true) horses, with origins considerably more recent than the currently accepted date of c. 10 Ma. Furthermore, we show that stilt-legged horses, commonly regarded as Old World migrants related to the hemionid asses of Asia, were in fact an endemic North American lineage. Finally, our data suggest that there were fewer horse species in late Pleistocene North America than have been named on morphological grounds. Both caballine and stilt-legged lineages may each have comprised a single, wide-ranging species.