Paleoecology has a dual relationship with sequence stratigraphy. On one hand, body and trace fossils, together with their taphonomy, may provide sensitive indicators of environmental parameters, including depth, substrate consistency, sedimentation rate/turbidity, and benthic oxygenation, which are critical in recognizing and interpreting parasequences and sequences. Fossils may provide some of the best guides to identifying key surfaces and inferring sedimentation dynamics within sequences. Conversely, the sequence stratigraphic paradigm and its corollaries provide a predictive framework within which to examine biotic changes and interpret their probable causes. Such changes include ecological epiboles (short-term, widespread proliferation of normally rare species), outages (absence of normally common species), ecophenotypic changes, and long-term (tens to hundreds of Ka) community replacement. Community replacement should be carefully distinguished from short-term (10 to a few hundred years) ecological succession, rarely resolvable at the scale of single beds, although replacement series through shallowing-to-deepening cycles may display some features that parallel true succession. Replacement in marine communities may be relatively chaotic, but, more commonly in offshore settings, it appears to involve lateral, facies-related shifting of broad biofacies belts, or habitat tracking. Tracking patterns may be nearly symmetrical in areas of low sediment input. However, replacement cycles are commonly asymmetrical. The asymmetries involve both apparent and real effects; deletion of portions of facies transitions at sequence boundaries or condensed sections leads to artifactual asymmetries. Alternatively, in areas proximal to siliciclastic sources, tracking asymmetries arise from the markedly higher sedimentation rates during regressive (late highstand) than transgressive phases. Replacements may also involve immigration of species into a sedimentary basin, either as short-lived events (incursion epiboles) or as wholesale faunal immigrations. The latter will typically follow intervals of extinction/emigration of the indigenous faunas. Both large and small immigration events appear most commonly during highstands (transgressive peaks), which may be associated with altered water-mass properties, and may open migration pathways for nekton and planktonic larvae. At least in isolated basins, allopatric speciation may also occur during fragmentation of habitats associated with regressions. Finally, there are predicted and empirical correlations between sequence-producing sea-level fluctuations and macroevolution. Major extinctions may be associated with habitat reduction during major regressions (lowstands), or with anoxic events during major transgressions. Generally, rising sea level may be correlated with evolutionary radiations. Hence, some ecological-evolutionary unit boundaries may correlate either with sequence boundaries or maximum flooding surfaces. However, in other cases, no correlation has been found between macroevolutionary patterns and sequence stratigraphy. The situation is obviously complex, but sequence stratigraphy at least provides a heuristic framework for developing and testing models of macroevolutionary process.