The phylogenetic placement of the red panda (Ailurus fulgens) and the giant panda (Ailuropoda melanoleuca) has been an evolutionary enigma since their original descriptions in the nineteenth century. A series of recent molecular analyses led to a consensus that the giant panda's ancestors were derived from early bears (Ursidae), but left unsettled the phylogenetic relationship of the red panda. Previous molecular and morphological phylogenies were inconclusive and varied among placement of the red panda within the raccoon family (Procyonidae), within the bear family (Ursidae), or in a separate family of carnivores equidistant between the two. To examine a relatively ancient (circa 20-30 million years before the present, MYBP) phylogenetic divergence, we used two slowly evolving genetic markers: mitochondrial 12S rRNA sequence and 592 fibroblast proteins resolved by two dimensional gel electrophoresis. Four different carnivore outgroup species, including dog (Canidae: Canis familiaris), cat (Felidae: Felis catus), fanaloka (Viverridae: Fossa fossa), and mongoose (Herpestidae: Galidia elegans), were selected to identify the root of the phylogenetic topologies. Phylogenetic reconstruction by distance-based methods, maximum parsimony, and maximum likelihood clearly indicate a distinct bifurcation forming the Ursidae and the Procyonidae. Further, our data consistently place the red panda as an early divergence within the Procyonidae radiation and confirm the inclusion of giant panda in the Ursidae lineage.