The within-habitat (alpha) diversity of metazoan marine fossil assemblages increased between the early-middle Paleozoic and the late Cenozoic; according to our tests, the observed increase cannot be explained merely as an artifact of preservational biases. Here, we investigate the ecological and evolutionary processes underlying this taxonomic diversification. We previously reported that the increase in alpha diversity from the mid-Paleozoic to the late Cenozoic correlates with an increase in the number of distinct ecological modes of life within single assemblages, where modes of life are defined on an animal's motility level, feeding mechanism, and position relative to the substratum. When examined in more detail, the increase in the number of ecological lifestyles within assemblages largely reflects the rise of infaunal and motile lifestyles among suspension feeders: the diversity and evenness of suspension-feeding modes of life within assemblages changed little from the Paleozoic to the Cenozoic, but more of these modes of life are layered into the multiple tiers of the average Cenozoic assemblage. The increase in alpha diversity also results from an expansion in the abundance and diversity of predators, many of whom divide niche space by specializing on prey taxa. We believe that increased energetics in marine ecosystems through time allowed the rise of modes of life with high metabolic rates, such as burrowers and predators. Studies of the modern Adriatic Sea (McKinney 2007) support this theory: epifaunal communities occur in areas of low primary productivity, whereas infauna are common where productivity is high. In the Cenozoic, diversity is highest in assemblages in which infauna and epifauna overlap (i.e., where the number of modes of life is highest), a situation that was difficult to achieve in the Paleozoic because infaunal animals were less abundant. Thus, expanded occupation of ecospace, likely driven by increased energetics, played a major role in Phanerozoic diversity history.