Understanding the relationship between taxonomic and morphological changes is important in identifying the reasons for accelerated morphological diversification early in the history of animal phyla. Here, a simple general model describing the joint dynamics of taxonomic diversity and morphological disparity is presented and applied to the data on the diversification of blastozoans. I show that the observed patterns of deceleration in clade diversification can be explicable in terms of the geometric structure of the morphospace and the effects of extinction and speciation on morphological disparity without invoking major declines in the size of morphological transitions or taxonomic turnover rates. The model allows testing of hypotheses about patterns of diversification and estimation of rates of morphological evolution. In the case of blastozoans, I find no evidence that major changes in evolutionary rates and mechanisms are responsible for the deceleration of morphological diversification seen during the period of this clade's expansion. At the same time, there is evidence for a moderate decline in overall rates of morphological diversification concordant with a major change (from positive to negative values) in the clade's growth rate.