Introduction One of the most interesting riddles within crustaceans is the origin of Cladocera (water fleas). Cladocerans are morphologically diverse and in terms of size and body segmentation differ considerably from other branchiopod taxa (Anostraca, Notostraca, Laevicaudata, Spinicaudata and Cyclestherida). In 1876, the famous zoologist Carl Claus proposed with regard to their origin that cladocerans might have evolved from a precociously maturing larva of a clam shrimp-like ancestor which was able to reproduce at this early stage of development. In order to shed light on this shift in organogenesis and to identify (potential) changes in the chronology of development (heterochrony), we investigated the external and internal development of the ctenopod Penilia avirostris and compared it to development in representatives of Anostraca, Notostraca, Laevicaudata, Spinicaudata and Cyclestherida. The development of the nervous system was investigated using immunohistochemical labeling and confocal microscopy. External morphological development was followed using a scanning electron microscope and confocal microscopy to detect the autofluorescence of the external cuticle. Results In Anostraca, Notostraca, Laevicaudata and Spinicaudata development is indirect and a free-swimming nauplius hatches from resting eggs. In contrast, development in Cyclestherida and Cladocera, in which non-swimming embryo-like larvae hatch from subitaneous eggs (without a resting phase) is defined herein as pseudo-direct and differs considerably from that of the other groups. Both external and internal development in Anostraca, Notostraca, Laevicaudata and Spinicaudata is directed from anterior to posterior, whereas in Cyclestherida and Cladocera differentiation is more synchronous. Conclusions In this study, developmental sequences from representatives of all branchiopod taxa are compared and analyzed using a Parsimov event-pairing approach. The analysis reveals clear evolutionary transformations towards Cladocera and the node of Cladoceromorpha which correspond to distinct heterochronous signals and indicate that the evolution of Cladocera was a stepwise process. A switch from a strategy of indirect development to one of pseudo-direct development was followed by a shift in a number of morphological events to an earlier point in ontogenesis and simultaneously by a reduction in the number of pre-metamorphosis molts. A compression of the larval phase as well as a shortening of the juvenile phase finally leads to a precocious maturation and is considered as a gradual progenetic process.