The discovery of 11 Nautilus macromphalus shells in marine environments near New Caledonia constitutes the first opportunity for taphonomic analysis of empty shells of unburied, externally shelled cephalopods on the seafloor. Radiometric dating indicates specimen ages range from 14 to 42 years. These modern specimens provide a unique opportunity to examine the early, preburial taphonomy of this group of animals including shell condition, radiometric-age dating, epizoan encrustation, color degradation, and sediment infilling. The following conclusions are made: (1) given the limited sample available for study and assuming equal conditions where shells rested on the seafloor, the length of time the shell is unburied will not control the degree of epizoan encrustation or the external shell appearance; (2) shell boring is a major destructive process that probably impacts the potential of the shells to become fossilized; and (3) shells in the photic zone are impacted differently than those dredged from a deep water environment below the photic zone. A major part of this difference is probably the result of both boring and encrusting organisms, especially algae. By comparison, fossil cephalopods as a general group can be expected to vary considerably from the modern specimens because of evolutionary patterns of associated organisms, geographic distribution, and different environments with different paleoecological parameters through time. Caution in overreliance on the taphonomy of these modern shells should be exercised because of the limited sample of Nautilus specimens recovered. The need for additional taphonomic studies of modern externally shelled cephalopods with the recovery of more specimens from the marine environment is highly desirable.