Inhabiting nearly every aquatic habitat and with over 32,000 species, teleost fishes are a major evolutionary success story. From tuna to seahorses and frogfishes, their species richness and ecological diversity is matched by extraordinary morphological diversity. Our understanding of the factors that contribute to this diversity is largely based on taxonomically-focused studies that are assumed to scale up to patterns seen across fishes. While we have a rich body of knowledge of how fishes have adapted to specific lifestyles, we lack a thorough understanding of how these factors have influenced patterns of diversity. In this dissertation, I explore the constraints and drivers of morphological diversification. Using phylogenetic comparative methods, with insights from ecology, functional morphology, and biomechanics, I investigate how body size, habitat transitions, and ecosystem occupation have contributed to body shape diversity across teleost fishes. Together, my three chapters contribute new insights into the intrinsic and extrinsic mechanisms responsible for the evolution of morphological diversity in fishes. In my first chapter, I investigate the influence of size on body shape disparity across reef fishes. Body size is not only crucially important to organismal life but can generate widespread shape diversity through allometric growth. Using geometric morphometrics to capture body shape across nearly 800 species, I find that body size not only accounts for very little morphological variation across fishes, but the relationship between shape and size is highly variable across families. I also find that rate of morphological evolution is negatively correlated with body size, while morphological disparity increases with size. This study demonstrates that-in contrast to other vertebrate lineages-body size has not been a significant constraint on morphological diversification in spiny-rayed fishes. In my second chapter, I examine how habitat transitions influence morphological diversification. The invasion of new habitats has the potential to completely reshape adaptive landscapes, introducing novel ecologies and adaptive zones. Fishes have repeatedly transitioned along the benthic-pelagic axis, with varying degrees of association with the substrate. Generalizing on consistent morphological trends reported in the literature, my second chapter focuses on the effects of habitat on body shape diversification across 3,344 marine teleost fishes. I compare rates and patterns of evolution in eight linear measurements of body shape among fishes that live in pelagic, demersal, and benthic habitats. I find that benthic living both facilitates the evolution of novel body shapes, such as extremely wide-bodied or elongate forms, and increases the rate of body shape evolution. Surprisingly, while habitat use only slightly affects average fish body shape, phenotypic variance is reasonably high across all habitats, mirroring that of all fishes combined. Instead of habitat serving as a constraint to fish morphology, this study highlights a prime example of the potential for habitat colonization to generate widespread morphological innovation and diversification. My third chapter expands on the concepts from my second chapter, taking advantage of the entire 6,000 species morphological dataset to compare patterns and processes morphological diversification both within benthic, demersal, and pelagic habitats and across freshwater and marine ecosystems. Using a novel comparative approach, I contrast the primary axis of morphological diversification in each habitat with the axis defined by phylogenetic signal. By comparing angles between these axes, I find that fishes in corresponding habitats have more similar primary axes of morphological diversity than would be expected by chance, but that different historical processes underlie these parallel patterns in freshwater and marine environments. Combined, my last two chapters demonstrate how ecological opportunities at many scales can have broad consequences for the morphological diversification of teleost fishes.