The Thalassocninae is a monogeneric subfamily of five species of Neogene sloths. Until now, Thalassocnus has been considered as belonging to the Nothrotheriidae, a family of megatherian ‘ground sloths’ of intermediate body size. However, no previous phylogenetic analysis has questioned such a familial attribution. Here we performed an extensive analysis including the required taxonomic sampling for such an attribution and characters from the whole skeleton. We found that Thalassocnus indeed belongs to Megatheria, but is clustered amongst Megatheriidae, the family that includes the large-size Megatherium. Moreover, the relationships amongst the five species of Thalassocnus are congruent with their respective stratigraphical positions, which allows the recognition of numerous morphoclines that document the adaptation of these sloths to the marine environment.