Ancestral vertebrate habitats are subject to controversy and obscured by limited, often contradictory paleontological data. We assembled fossil vertebrate occurrence and habitat datasets spanning the middle Paleozoic (480 million to 360 million years ago) and found that early vertebrate clades, both jawed and jawless, originated in restricted, shallow intertidal-subtidal environments. Nearshore divergences gave rise to body plans with different dispersal abilities: Robust fishes shifted shoreward, whereas gracile groups moved seaward. Fresh waters were invaded repeatedly, but movement to deeper waters was contingent upon form and short-lived until the later Devonian. Our results contrast with the onshore-offshore trends, reef-centered diversification, and mid-shelf clustering observed for benthic invertebrates. Nearshore origins for vertebrates may be linked to the demands of their mobility and may have influenced the structure of their early fossil record and diversification.