Improvements in our understanding of green plant phylogeny are casting new light on the connection between character evolution and diversification. The repeated discovery of paraphyly has helped disentangle what once appeared to be phylogenetically coincident character changes, but this has also highlighted the existence of sequences of character change, no one element of which can cleanly be identified as the “key innovation” responsible for shifting diversification rate. In effect, the cause becomes distributed across a nested series of nodes in the tree. Many of the most conspicuous plant “innovations” (such as macrophyllous leaves) are underlain by earlier, more subtle shifts in development (such as overtopping growth), which appear to have enabled the exploration of a greater range of morphological designs. Often it appears that these underlying changes have been brought about at the level of cell interactions within meristems, highlighting the need for developmental models and experiments focused at this level. The standard practice of attempting to identify correlations between recurrent character change (such as the tree growth habit) and clade diversity is complicated by the observation that the “same” trait may be constructed quite differently in different lineages (e.g., different forms of cambial activity), with some solutions imposing more architectural limitations than others. These thoughts highlight the need for a more nuanced view, which has implications for comparative methods. They also bear on issues central to Stephen Jay Gould's vision of macroevolution, including exaptation and evolutionary recurrence in relation to constraint and the repeatability of evolution.