Cephalopoda, despite its small size, is probably one of the most diverse classes of animals known. There are between 700 and 900 species, divided into approximately nine orders (Nautiloida, Spirulida, Sepioloida, Idiosepiida, Myopsida, Oegopsida, Bathyteuthoida, Vampyromorpha, Octopoda). The higher taxonomy is finally beginning to stabilise, largely due to the application of molecular techniques, but relationships between higher taxa are not yet well established. At lower levels, the taxonomy is even less stable. Numerous species are known only from the type material and for yet more species, the type material is no longer extant. The lack of hard parts, and the poor preservation of many older specimens, has delayed taxonomic progress. The numerous outstanding taxonomic issues are posing considerable problems to the red-listing process.Cephalopods inhabit all marine habitats and to a certain extent they appear to be constrained in their habitat by their evolutionary origins. For example, cuttlefishes and bob-tailed squids (Sepioloida) and myopsid squids (Myposida) are mostly neritic and upper slope benthic species. Pearly nautiluses (Nautiloida) and Spirula spirula (Spirulida), with their buoyancy shells (external and internal respectively), are mesopelagic. Other squids (Oegopsida and Bathyteuthoida) and the vampire squid (Vampyromorpha) inhabit the open ocean. Pygmy squids (Idiosepiida) are found in shallow water in the Indo-West Pacific where they use their special adhesive organ to attach to algae and sea grasses. Octopuses (Octopoda) are found in all these habitats.The open ocean habit of many species renders them less susceptible to anthropogenic effects, however, there are fisheries for open ocean squids (as well as coastal squids, octopuses and cuttlefishes) and there is evidence of stock depletion. Conversely, whilst the size of pygmy squids makes them commercially unattractive, the association of some pygmy squids with Zostera makes them vulnerable to habitat loss. Few other species for which we have good data appear to have a particularly restricted distribution, or a preference for a narrow habitat, so they are less susceptible to local habitat loss. Additionally many, but by no means all, species have a wide distribution, are highly fecund, producing hundreds and thousands of larvae, and reach maturity rapidly. Pearly nautiluses, however, have an almost opposite life history. They are slow growing and not very fecund. Their value in the shell trade makes their position particularly precarious. They are undoubtedly the most threatened of all cephalopods.