Coevolutionary interactions between species are thought to be an important cause of evolutionary diversification. Despite this general belief, little theoretical basis exists for distinguishing between the types of interactions that promote diversification and those types that have no effect or that even restrict it. Using analytical models and simulations of phenotypic evolution across a metapopulation, we show that coevolutionary interactions promote diversification when they impose a cost of phenotype matching, as is the case for competition or host-parasite antagonism. In contrast, classical coevolutionary arms races have no tendency to promote or inhibit diversification, and mutualistic interactions actually restrict diversification. Together with the results of recent phylogenetic and ecological studies, these results suggest that the causes of diversification in many coevolutionary systems may require reassessment.