The abilities of some cave‐nesting swiftlets to echolocate has traditionally been used to separate the genus Aerodramus, which includes echolocating species, from the genus Collocalia, thought to lack echolocation. Here we report the discovery of echolocation in a member of the latter genus, the pygmy swiftlet Collocalia troglodytes. We also present a well‐supported molecular phylogeny for the swiftlets and their relatives based on DNA sequence data from two mitochondrial genes, which we use to reconstruct the evolution of echolocation. Our data provide strong evidence that the swiftlets are a monophyletic group. This monophyly plus the presence of echolocation in C. troglodytes indicate that either (1) echolocation evolved much earlier in the swiftlets than previously thought and has since been lost in most Collocalia taxa, or (2) this ability evolved independently in Aerodramus and Collocalia. Based on our results, echolocation can no longer be considered a useful character for distinguishing these two genera.