Cynodont therapsids diversified extensively after the Permo-Triassic mass extinction event, and gave rise to mammals in the Jurassic. We use an enlarged and revised dataset of discrete skeletal characters to build a new phylogeny for all main cynodont clades from the Late Permian to the Early Jurassic, and we analyse models of morphological diversification in the group. Basal taxa and epicynodonts are paraphyletic relative to eucynodonts, and the latter are divided into cynognathians and probainognathians, with tritylodonts and mammals forming sister groups. Disparity analyses reveal a heterogeneous distribution of cynodonts in a morphospace derived from cladistic characters. Pairwise morphological distances are weakly correlated with phylogenetic distances. Comparisons of disparity by groups and through time are non-significant, especially after the data are rarefied. A disparity peak occurs in the Early/Middle Triassic, after which period the mean disparity fluctuates little. Cynognathians were characterized by high evolutionary rates and high diversity early in their history, whereas probainognathian rates were low. Community structure may have been instrumental in imposing different rates on the two clades.