The phanerozoic is the most recent eon in geological terms. It started about 542 million years ago, and continues to this day. The name "phanerozoic" (meaning visible or apparent life) reflects that this was the period when large organisms (visible to the naked eye) appeared in great profusion. In the early days of geology, this was the designation given to strata where metazoan fossils first started to appear. Today, this definition remains largely true, though we now know that in some places at least, metazoans appeared earlier than the start of the phanerozoic (in the Ediacaran or Vendian period of the preceding proterozoic era). At any rate, this was the period when metazoans started to diversify and multiply greatly. This rapid expansion of metazoan life forms is sometimes referred to as the Cambrian Explosion. The phanerozoic is a brief period in the Earth's history, about half a billion years, a bit less than 12% of the time that the Earth has existed, but almost all metazoan life is confined to this period.
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The causes of this (relatively) sudden explosion of multicellular life are not well understood. Life on Earth appeared at least 3.5 billion years ago, in the paleoarchean, as evidenced by stromatolites found in rocks of that age in Australia. For much of Earth's history, life was unicellular and prokaryotic. But eukaryotes appeared about 1.4 billion years ago, during the mesoproterozoic, and the first evidence of multicellular life is almost as ancient - about 1.2 billion years old, during the Ectasian period of the mesoproterozoic. Why then, did it take another half billion years for more complex forms to appear? Assuming, of course, that the fossil record is reliable in this regard, which is by no means certain. Small soft-bodied animals do not fossilize well, and rocks of such great age are relatively uncommon. So it may well be that complex life goes back earlier than we currently know. As mentioned above, the discovery of Ediacaran fossils also produced a change in our thinking, pushing back the appearance of complex multicellular life by another 20+ million years.
Such ideas also have implications about how we think of evolution. The sudden appearance of a diversity of organisms during the Cambrian was one of the reasons why evolutionary biologists such as Stephen Jay Gould proposed the theory of punctuated equilibrium - that evolution follows a pattern of relative stasis interrupted by bursts of rapid change. However, with the discovery of earlier fossils, such as those from the Ediacaran, it is becoming clearer that these "bursts" of change were not as abrupt as we had thought, that they were part of a more gradual process of evolution. Also, modern re-interpretations of early Ediacaran and Cambrian fossils indicate that they might not be as "diverse" as we previously thought. Some of the forms of these fossils (such as critters with 5 eyes or 3 legs) were so different from modern life that people assumed that numerous new phyla suddenly appeared, and competition between them caused some to become extinct, leaving behind only the more successful ones. But modern interpretations show that it is not necessary to assume such a plurality of phyla, that the great diversity seen in the fossil record may reflect modifications and variations of much fewer fundamental body plans.
Given these things, it is still remarkable how much life changed at the start of the phanerozoic. This was truly the beginning of large, macroscopic, complex life - the period in which such life became established, evolved, and led to most of the forms we see today.
Landmasses during the Phanerozoic
Plate tectonics drives the movement and formation of continents, and over the history of the Earth, continents have appeared, changed shape, moved around, and sometimes disappeared. Here is a short blurb I wrote on the presumed history of different continents. Prior to the phanerozoic, the supercontinent Rodinia existed between about 1.1 billion and 750 million years ago. Rodinia was a barren, desolate landmass, since life had not yet colonized land. Around 750 million years ago, Rodinia started to rift apart, and broke into 3 major pieces: Proto-Laurasia, Proto-Gondwana, and the Congo craton. Proto-Laurasia drifted southwards towards the South Pole. Proto-Gondwana rotated northwards, and for a time, the Congo craton lay between these two landmasses, forming another supercontinent - Pannotia - around 600 million years ago, just before the start of the phanerozoic. Since the two major landmasses lay towards the poles, joined by a much smaller landmass at the equator (the Congo craton), the climate is presumed to have been very cold, with extensive glaciation.
Temperature record of the Earth during its 4.6 billion year history (from Barry Saltzman, Dynamical Paleoclimatology: Generalized Theory of Global Climate Change, Academic Press, New York, 2002, fig. 1-3).
The radiation of complex life starts with this period, around 563 million years ago, in the Ediacaran. This was a period of major changes. Pannotia existed for a very short time - around 60 million years - because the collisions that formed it were glancing collisions between landmasses that were already rifting and breaking up. Around 540 million years ago, the breakup of Pannotia was complete - into 4 major landmasses: Laurentia, Gondwana, Baltica and Siberia.
The last supercontinent was Pangaea, which formed during the early Permian, about 300 million years ago. This landmass existed more or less intact for the next 100-150 million years, until it started to break up in the early-mid Jurassic. The break up was in 3 phases, beginning with the early/mid Jurassic up to the end of the Cretaceous and the beginning of the Cenozoic, around 50-60 million years ago.
These events are important in understanding the distribution of plants and animals, for example, in explaining why North American dinosaurs in the Cretaceous did not spread across the rest of the world (north America had already broken away from the Pangaean landmass during the mid-Jurassic). Also, the breakup and rifting of this huge landmass created many shallow seas, which were important habitats for many animals that existed during the time.
Climate during the Phanerozoic
It is difficult to estimate the climate or average temperature of the Earth in past geological ages. Various indirect means are used to deduce these things, and the degree of error is very high the farther back in time we go. More accurate readings are available for relatively recent times, based on ice cores taken from the Antarctica or the Greenland ice cap. The Vostok and EPICA cores from the Antarctica go back at least 450,000 years. For earlier periods, the records are much less reliable.
The accompanying climate graph shows the estimated temperature of the Earth over its 4.6 billion year history. We assume that the Earth cooled down rapidly from the hot, semi-molten state in which it was formed, and within the first 100 million year or so, the surface was cool enough to support liquid water. Of course, surface temperatures were still much higher than they are today. By about 4 billion years ago, the Earth was on a cooling trend, but average global temperatures were still much higher than today (about 25-28 °C compared to about 15 °C today).
Atmospheric Oxygen Levels, two different records, based on (1) Berner, R, et al., 2003, Phanerozoic atmospheric oxygen, Ann. Rev. Earth Planet. Sci., V, 31, p. 105-134, and (2) Falkowski, P, et al., 2005, The rise of oxygen over the past 205 million years and the evolution of large placental mammals, Science, V. 309, p. 2202-2204 (Sept. 2005)
Note that the time scale (y-axis) on the climate graph is not to scale. The pre-cambrian is shown on a much smaller scale, followed by the paleozoic and mesozoic on the same medium scale, and finally the quaternary on a much larger scale. In the early (pre-cambrian) record, we see high average temperatures, with one large dip in the temperature graph, corresponding to the Huronian glaciation, about 2.4 - 2.1 billion years ago during the Siderian period. Life has existed on Earth for at least 3.5 billion years (perhaps even 4 billion years), but around 2.8 billion years ago, with the evolution of photosynthetic organisms, oxygen started being produced in large quantities. For many hundreds of millions of years, this oxygen production produced no discernable rise in atmospheric oxygen, due to the presence of various oxygen sinks or buffers. However, around 2.5 billion years ago, enough oxygen had accumulated to produce an Oxygen Catastrophe. Life during that period was anaerobic, and oxygen was toxic to it. During the oxygen catastrophe some trigger either released vast amounts of accumulated oxygen, or else the oxygen buffers reached their capacity, and free oxygen started rising, causing a mass extinction event. This was possibly the trigger for the Huronian glaciation, though the exact mechanism remains unknown.
The next major dip in the graph occurred around 800 - 630 million years ago, during the Cryogenian. This was the most extensive cooling the Earth has ever seen, and resulted in the "snowball Earth" scenario, when glaciers possibly covered the entire Earth. This cooling may have been associated with the formation and breakup of the supercontinent Rodinia, which interrupted oceanic currents that disperse heat from the equator.
The phanerozoic begins with the warming of the Earth after the Cryogenian. The initial radiation of metazoa precedes the phanerozoic by a few million years, in the late Ediacaran period. This is pretty much the period when the Earth had warmed to temperatures similar to the present, after the cryogenian glaciations.
During the first part of the phanerozoic - the paleozoic era, the Earth was somewhat warmer than today. Glaciations were rare, and the climate was much more stable than today. The two notable glaciations during this period occurred during the late Ordovician and late Carboniferous, and both are associated with extinction events. For much of the paleozoic, the Earth was free of glaciers and sea levels were high. This turned many of the lower altitude parts of the continents into shallow seas, where marine life first took hold. During the early paleozoic, most metazoan life was still in the sea - it was not until the middle paleozoic that life on land first took hold.
The middle part of the phanerozoic - the mesozoic, was accompanied by rising temperatures and a stable climate, with no glaciations. In the early mesozoic, the climate was hot and dry. Pangaea was a huge landmass, and the interior parts must have been vast deserts, being far away from the oceans. Despite the high temperatures (probably about 10 °C warmer on average than today), sea levels remained low, because the landmass was clustered into one large continent.
In the Jurassic, Pangaea started to break apart. Although temperatures continued to rise, the spreading of the sea floor increased sea levels, as new crust was formed on the sea floors. This caused flooding of the low lying coastal areas, and together with the increase in coastlines due to the breakup of Pangaea, the climate became much more humid. The vast deserts of the Triassic retreated, and for the most part, were confined to the interiors of continents.
Oxygen levels were lower in the Jurassic than they are today. Good estimates are lacking, so it's hard to say how much lower. The accompanying graph shows the oxygen levels according to two published papers. The more recent record shows the Jurassic starting with oxygen levels below 10% (though they rapidly rise to 15-17% for the rest of the mesozoic). These figures have been disputed. Many people believe that oxygen levels were at least high enough to support natural combustion, which requires atmospheric oxygen levels of at least 12% (at least 15% according to some newer publications).
The climate of the late mesozoic, or Cretaceous, is less certain. Some people believe that the much higher levels of carbon dioxide which existed at the time produced a flat temperature gradient across the whole Earth, with very little dependence on latitude. If this is true, equatorial regions must have been hot enough to be largely deserts, despite the presence of nearby oceans. No glaciers could exist even at the poles with such a flat temperature gradient. This is also disputed, since some computer models indicate that glaciers should exist at least at the poles. However, there is no geological record of any glaciations during the entire mesozoic.
High temperatures would have also warmed the oceans, and some models show that the oceans may have reached temperatures of up to 20 °C, even in the deep ocean. This would have been too warm for sea life, and probably vast volumes of the ocean lacked enough oxygen as well to sustain life. These conclusions remain uncertain, though, and more research is needed to better understand the climate during the cretaceous.
The late phanerozoic, or Cenozoic period shows continuing warm temperatures at the beginning, but a prolonged cooling trend starting towards the end of the Eocene. This was due to the separation of South America from the Antarctica (the opening of the Drake Passage), which allowed the formation of the Antarctica Circumpolar Current, which brings cool water from the depths of the Antarctica to the surface.
The cooling trend continued through the Miocene, with small fluctuations between warmer and colder periods. Towards the end of the Miocene, South America became attached to North America, forming a continuous land barrier between the Atlantic and Pacific oceans. This caused the strengthening of the Humboldt Current and the Gulf Stream, which rapidly cooled down the Arctica. This cooling of the northern hemisphere produced a steeper cooling trend, specially since the start of the Pleistocene, which continue to this day. This has led to cycles of intense glaciations, called ice ages, during which glaciers advance from the north and form mile-thick sheets of ice over the northern landmasses. We are currently in an interglacial warm period.
You can read more about the recent ice ages here.