Coiled cephalopods constitute a major part of the Paleozoic nekton. They emerged in the Early Ordovician but nearly vanished in the Silurian. The Emsian appearance of ammonoids started a story of evolutionary success of coiled cephalopods, which lasted until the end-Permian extinction event. This story is investigated by using a taxonomic database of 1346 species of 253 genera of coiled nautiloids and 1114 genera of ammonoids. The per capita sampling diversities, the Van Valen metrics of origination and extinction, and the probabilities of origination and extinction were calculated at stage intervals. The outcome of these estimations largely reflects the known biotic events of the Paleozoic. The polyphyletic, iterative appearance of coiled cephalopods within this time frame is interpreted to be a process of adaptation to shell-crushing predatory pressure. The evolution of the diversity of coiled nautiloids and ammonoids is strongly correlated within the time intervals. Once established, assemblages of coiled cephalopods are related to changes in sea level. The general trends of decreasing mean (or background) origination and extinction rates during the Paleozoic are interpreted to reflect a successive stabilization of the coiled cephalopod assemblages. Different reproduction strategies in ammonoids and nautiloids apparently resulted in different modes of competition and morphological trends. Significant morphological trends toward a stronger ornamentation and a centrally positioned siphuncle characterize the evolution of Paleozoic nautiloids.