Dire wolves (Aenocyon dirus) are extinct predators of Pleistocene North America. Although phenotypically similar to living wolves (Canis lupus), dire wolves have yet to be placed confidently in the canid family tree. We generated 3.4x and 12.8x paleogenomes from two well-preserved dire wolves dating to > 13,000 and > 72,000 years ago, and estimated consensus species trees for these and 10 canid species. Our results revealed that ~2/3 of dire wolf ancestry is derived from a lineage sister to the clade comprising the gray wolf, coyote, and dhole, and the remaining ~1/3 from a lineage near the base of Canini diversity. We identified 80 genes evolving under diversifying selection in dire wolves. Our results underscore the power of paleogenomes to resolve long-standing taxonomic questions and contribute to growing evidence of the role of post-speciation gene flow as an evolutionary force.