Alpheid snapping shrimp are one of the most diverse groups of coral-reef fauna, and sponge-dwelling shrimp in the genus Synalpheus (gambarelloides species group) have in particular become a model system for studying the evolution of social biology and host use in marine invertebrates. Despite recent advances in understanding the evolution and systematics of Synalpheus, the taxonomy and phylogenetic relationships within this group remain challenging. More than 20 new species in the S. gambarelloides species group have been described over the past two decades, primarily within several cryptic species complexes, which has doubled the known diversity of this group in the West Atlantic. Here we construct a new phylogenetic tree describing relationships between 40 different species from the S. gambarelloides-group (119 individuals from across the Caribbean), using a combined dataset consisting of two mitochondrial loci (16S and COI), one nuclear protein-coding gene (elongation-factor 2), and 33 morphological characters. Putative conspecific specimens of Synalpheus from multiple locations across the Caribbean were always monophyletic (with one exception), providing strong support for the validity of species concepts based on morphology. Our study also provides further evidence for the monophyly of the S. gambarelloides-group in the Caribbean, resolves the molecular relationships within many recently described species complexes, and provides a new phylogenetic framework for future evolutionary studies of this group.