Decapodiformes, including cuttlefishes and squid, are ecologically diverse cephalopods widely distributed throughout the world's oceans, yet the evolutionary history of their morphological and ecological traits remains poorly understood. Here, we developed a phylogenetic workflow for decapodiforms by integrating transcriptomic and genome skimming data from 48 freshly collected and historical specimens. The resulting dataset comprised over 6000 loci and covered all major extant lineages. Phylogenetic analyses consistently recovered Idiosepida as the sister lineage to all other decapodiforms. Among the remaining lineages, Spirulida was sister to a Bathyteuthida-Oegopsida clade, which was successively sister to Sepiida, Myopsida and Sepiolida. Using this robust phylogenetic framework, we investigated the evolution of five traits associated with transitions from shallow marine to deep-sea habitats and internal shell morphology. Our results indicate that increasing habitat depth was associated with the evolution of pelagic distributions, a higher prevalence of autogenic photophores, and the loss of bacteriogenic photophores, the cornea and circumferential muscles of arm and tentacular club suckers. The ancestral internal shell transitioned from a calcareous structure to a chitinous gladius, whereas the calcareous shell of Sepiida represents an independent evolutionary reacquisition.