RNA editing, a post-transcriptional process, allows the diversification of proteomes beyond the genomic blueprint; however it is infrequently used among animals for this purpose. Recent reports suggesting increased levels of RNA editing in squids thus raise the question of the nature and effects of these events. We here show that RNA editing is particularly common in behaviorally sophisticated coleoid cephalopods, with tens of thousands of evolutionarily conserved sites. Editing is enriched in the nervous system, affecting molecules pertinent for excitability and neuronal morphology. The genomic sequence flanking editing sites is highly conserved, suggesting that the process confers a selective advantage. Due to the large number of sites, the surrounding conservation greatly reduces the number of mutations and genomic polymorphisms in protein-coding regions. This trade-off between genome evolution and transcriptome plasticity highlights the importance of RNA recoding as a strategy for diversifying proteins, particularly those associated with neural function. PAPERCLIP.