Evolutionary biologists have endeavoured to explain the extraordinary diversity of sperm morphology across animals for more than a century. One hypothesis to explain sperm diversity is that sperm length is shaped by the environment where fertilization takes place (that is, fertilization mode). Evolutionary transitions in fertilization modes may transform how selection acts on sperm length, probably by affecting postcopulatory mechanisms of sperm competition and the scope for cryptic female choice. Here, we address this hypothesis by generating a macro-evolutionary view of how fertilization mode (including external fertilizers, internal fertilizers and spermcasters) influences sperm length diversification among 3,233 species from 21 animal phyla. We show that sperm are shorter in species whose sperm are diluted in aquatic environments (that is, external fertilizers and spermcasters) and longer in species where sperm are directly transferred to females (that is, internal fertilizers). We also show that sperm length evolves faster and with a greater number of adaptive shifts in species where sperm operate within females (for example, spermcasters and internal fertilizers). Our results demonstrate that fertilization mode is a key driver in the evolution of sperm length across animals, and we argue that a complex combination of postcopulatory forces has shaped sperm length diversification throughout animal evolution.