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The first significant evolutionary change to the horse took place during the Oligocene period (32 – 24 million years ago). At that time the forests in North America began yielding to grasslands, and as a result the Hyracotherium quickly evolved to adapt to these new surroundings. This evolution led to the Mesohippus ("middle horse").
The Mesohippus was larger than its former incarnation, measuring approximately 24" high at the shoulder. Its features became less canine and more equine: the back was less arched, the neck and the face became longer, and the limbs became leggier. Their feet retained the pads, but the front feet lost a toe, so Mesohippus' possessed three in front and three in back. The teeth changed to better accommodate grazing too, converting all but one of the prior premolars into grinding molars.
These physical changes allowed the Mesohippus to travel distances quicker, better escape predators while it was exposed in the open grasslands, and graze on grasses and rougher vegetation.
At this point evolution started sprouting roots rather than following a straight line. The next horse evolution was from the Mesohippus to the Miohippus, and the evolution was so sudden that both evolutionary variations co-existed alongside each other (until the Mesohippus eventually became extinct). The Miohippus retained the same basic features of the Mesohippus; its two primary differences were changes within the structure of the ankles as well as its overall larger size.
The Miocene period (about 17 million years ago) saw a dramatic burst in horse evolution as the prior equid forms evolved into the Merychippus. The Merychippus grew in height significantly, reaching an average of 40 inches in height at the shoulders. The head became even more elongated, the brain grew larger, the eyes were set back further, and the teeth completed their transition into grinding teeth.
While the feet maintained their three toes, the Merychippus no longer stood on its pads, but rather its toes. The central toe also began to develop into the modern hoof. Due to their increased intelligence and longer legs, the Merychippus gained significant speed, which was ideal for evading predators as well as migrating to new grazing grounds.
This is the first incarnation of equid that would actually retain a significant resemblance to the modern horse. This incarnation also saw the rise of the Merychippine Radiation (about 15 million years ago), which is the term given to the period whereby evolution was proceeding at a rapid clip, creating three branches of Merychippus and many species variations.
We won't cover all the Merychippus species here, but the next major evolutionary advance of the horse was the Pliohippus, which took place around 12-14 million years ago. The Pliohippus eventually shed two of its toes, forming a single hoof. Although the Pliohippus bore a strong resemblance to the modern Equus, it's believed by many that the Pliohippus is not actually an evolutionary direct ancestor of the modern horse, but rather a close relative. The reason for this belief is that the Pliohippus' teeth were curved (as opposed to the Equus' straight teeth), and they possessed deep facial fossae (whereas the Equus doesn't possess any).
So if the Pliohippus was not the evolutionary link to the modern horse, what was?
Enter the Plesippus, an evolutionary ancestor of the Merychippus. The Plesippus was about the size of an Arabian Horse, and they existed around 5 million years ago.
At the end of the Pliocene period (about 2.5 million years ago) the climate in North America began cooling significantly, causing the Plesippus to migrate. Most migrated south, but one group crossed the Bering Strait land bridge into the Eurasia continent. This is how Equidae spread from North America to Eurasia and eventually to Europe.
Plesippus are believed to have eventually evolved into the modern Equus, but since horse evolution isn't a straight line the two likely existed side-by-side for a period of time. This article didn't cover all the evolutionary equid variations since entire books can be written on the topic, but if you would like to see a horse evolution chart that gives a good basic idea of just how branching the equine evolutionary process truly was, visit http://esp.cr.usgs.gov/research/fossils/miocenehorse.html.
But wait a moment! Weren't horses introduced to North America by Christopher Columbus? How could this be true if horses originated in North America?
Around the year 11,000 all forms of Equidae became extinct in North America rather suddenly. The exact reason for their extinction is still unknown, though two primary theories emerged:
Whatever the abrupt cause of their extinction in North America, Equidae, which once flourished for millions of years, no longer existed on the continent for almost 10,000 years. Luckily horses flourished in Eurasia, and eventually lead to the discovery of horse domestication, which you can read about in The History Of Horse Domestication.
This all changed in 1493, when Columbus and subsequent world travelers reintroduced Iberian horses to the North American continent.
At face value the topic of horse evolution would seem to be "safe" subject, but there are many that dispute the science behind horse evolution and believe the commonly-taught modern theories to be flat-out wrong. Check out what all the controversy is about at Could The Evolution Of The Horse Be A Fraud?