The fossil evidence is rather sparse and no intermediate species between a flying ancestor and the flightless penguins has ever been discovered.  Accordingly many authors take the view that speciation was very rapid as the penguins developed with many distinct species appearing in a relatively short period around 50 to 100 million years ago.

The closest flying relatives of the penguins today are the Procellaridae (the Albatross and Petrels) and the Gaviidae (the Divers).

Although there are not enough fossils available to track the evolution of  penguins from flighted birds right through to the modern penguins, with a little intelligent guesswork, a fair picture can be built up.

The best way to see what the early penguins must have been like is to look at birds alive today, that still fly, but have evolved wings that allow them to swim strongly underwater.  Such birds will most probably have an outward appearance similar to the early penguins.  The obvious candidates are the puffins and auks found in the Northern hemisphere.  Indeed, the Great Auk, which became extinct about 200 years ago had given up the power of flight in exchange for improved swimming ability and increased size, looked quite like a penguin and was even sometimes (incorrectly) classified as a penguin.

If a sea bird evolves stiff enough wings that it can "fly" underwater, then it has a maximum body weight before the wings are too small to allow it to fly in the air as well.  This size is around the size of the smallest of today's penguins - the Galapagos and Little penguins.  So we can see that before penguins lost the power of aerial flight they were quite small birds with an outward appearance not unlike the modern puffins.

The main evolutionary advantage of giving up aerial flight is the improved swimming ability; in particular being able to swim quickly helps in catching fish and being able to dive to great depths (some modern penguins can dive up to 300 metres - 1000 feet) greatly increases the range of food available to hunt.

A major influence in the evolution of penguins is likely to have been the availability of vast amounts of food in the ocean.  The break up of the proto-continent, Gondwanaland, was completed around 200,000,000 years ago and left the Antarctic continent completely surrounded by an ocean.  The resulting cold currents established in the southern ocean (once the polar ice cap had formed) made them rich in nutrients and hence led to the huge amounts of fish and crustaceans, etc. in this area.  Today, the Southern Ocean is easily the most productive place in the world.  So birds that could exploit this vast food supply could flourish.  An additional bonus was that the early penguins could reach and breed on remote islands where no land predators had evolved.  With no land based predators and being able to out-swim any sea based predators, the early penguins could thrive.

The result was a great diversity of penguin species (see the fossil page for more details of some of these) ranging from quite small to very large (as big as a man!).  These penguins probably specialised in different food sources and were subject to decline if their particular food source was depleted by any other source, or from competition with another predator.

The penguins quite likely ruled the southern oceans (along with a few sharks) as a top predator for several millions of years. However, mammals were also evolving to take advantage of the same rich food sources in the Southern Oceans.  By about 50,000,000 years ago the seals, dolphins and whales had all evolved close to their modern appearances.  These pinnipeds and cetaceans would have formed considerable and stiff competition for some of the species of penguins and it may be through a combination of direct predation by these marine mammals and competition for the food stocks, that some of the many fossil species came to extinction.