This chapter focuses on the evolutionary importance and taxonomic distribution of euryhalinity. Euryhalinity refers to broad halotolerance and broad halohabitat distribution. Salinity exposure experiments have demonstrated that species vary tenfold in their range of tolerable salinity levels, primarily because of differences in upper limits. Halotolerance breadth varies with the species’ evolutionary history, as represented by its ordinal classification, and with the species’ halohabitat. Freshwater and seawater species tolerate brackish water; their empirically-determined fundamental haloniche is broader than their realized haloniche, as revealed by the halohabitats they occupy. With respect to halohabitat distribution, a minority of species (<10%) are euryhaline. Habitat-euryhalinity is prevalent among basal actinopterygian fishes, is largely absent from orders arising from intermediate nodes, and reappears in the most derived taxa. There is pronounced family-level variability in the tendency to be halohabitat-euryhaline, which may have arisen during a burst of diversification following the Cretaceous-Palaeogene extinction. Low prevalence notwithstanding, euryhaline species are potent sources of evolutionary diversity. Euryhalinity is regarded as a key innovation trait whose evolution enables exploitation of new adaptive zone, triggering cladogenesis. We review phylogenetically-informed studies that demonstrate freshwater species diversifying from euryhaline ancestors through processes such as landlocking. These studies indicate that some euryhaline taxa are particularly susceptible to changes in halohabitat and subsequent diversification, and some geographic regions have been hotspots for transitions to freshwater. Comparative studies on mechanisms among multiple taxa and at multiple levels of biological integration are needed to clarify evolutionary pathways to, and from, euryhalinity.