Analysis of a global elevation database to measure changes in shallow-marine habitat area as a function of sea-level reveals an unexpectedly complicated relationship. In contrast to prevailing views, sea-level rise does not consistently generate an increase in shelf area, nor does sea-level fall consistently reduce shelf area. Different depth-defined habitats on the same margin will experience different changes in area for the same sea-level change, and different margins will likewise experience different changes in area for the same sea-level change. Simple forward models incorporating a species-area relationship suggest that the diversity response to sea-level change will be largely idiosyncratic. The change in habitat area is highly dependent on the starting position of sea level, the amount and direction of sea-level change, and the habitat and region in question. Such an idiosyncratic relationship between diversity and sea-level reconciles the widespread evidence from the fossil record for a link between diversity and sea-level change with the lack of quantitative support for such a relationship throughout the Phanerozoic.