With approximately 30 recognised extinct genera, beavers were once a taxon-rich rodent group adapted to both terrestrial and aquatic habitats [1,2]. Today, only two morphologically similar species survive, the Eurasian and the North American beaver [3]. Both are known for their aquatic lifestyle and their woodcutting and engineering behaviour, which allows them to alter the environment and affect sympatric species [3]. Palaeontological studies suggest that aquatic and woodcutting behaviours are derived traits shared only between the extinct group of giant beavers and the extant beaver lineage [1,3]. Here we use 7,686 base pairs of mitochondrial DNA from the extinct giant beaver Castoroides ohioensis to investigate when these behaviours originated in beavers. Our phylogenetic analysis retrieves the anticipated sister relationship of giant beavers to the extant beavers and places the time to their common ancestor during the early Miocene, approximately 20 million years ago (mya). Our results are congruent with inferences from the fossil record [1] in suggesting a single evolutionary transition from terrestrial to aquatic life, although they place this event approximately four million years later compared to previous fossil studies [1].