We consider the dynamics on the C∗-algebras of finite graphs obtained by lifting the gauge action to an action of the real line. Enomoto, Fujii and Watatani [KMS states for gauge action on OA. Math. Japon. 29 (1984), 607–619] proved that if the vertex matrix of the graph is irreducible, then the dynamics on the graph algebra admits a single Kubo–Martin–Schwinger (KMS) state. We have previously studied the dynamics on the Toeplitz algebra, and explicitly described a finite-dimensional simplex of KMS states for inverse temperatures above a critical value. Here we study the KMS states for graphs with reducible vertex matrix, and for inverse temperatures at and below the critical value. We prove a general result which describes all the KMS states at a fixed inverse temperature, and then apply this theorem to a variety of examples. We find that there can be many patterns of phase transition, depending on the behaviour of paths in the underlying graph.