Every fossil tells us something about the age of the rock it's found in, and index fossils are the ones that tell us the most. Index fossils (also called key fossils or type fossils) are those that are used to define periods of geologic time.
Characteristics of an Index Fossil
A good index fossil is one with four characteristics: it is distinctive, widespread, abundant, and limited in geologic time. Because most fossil-bearing rocks formed in the ocean, the major index fossils are marine organisms. That being said, certain land organisms are useful in young rocks and specific regions.
Any type of organism can be distinctive, but not so many are widespread. Many important index fossils are of organisms that start life as floating eggs and infant stages, which allowed them to populate the world using ocean currents. The most successful of these became abundant, yet at the same time, they became the most vulnerable to environmental change and extinction. Thus, their time on Earth may have been confined to a short period of time. That boom-and-bust characteristic is what makes the best index fossils.
Trilobites, Hard-Shelled Invertebrates
Consider trilobites, a very good index fossil for Paleozoic rocks that lived in all parts of the ocean. Trilobites were a class of animal, just like mammals or reptiles, meaning that the individual species within the class had noticeable differences. Trilobites were constantly evolving new species during their existence, which lasted 270 million years from Middle Cambrian time to the end of the Permian Period, or almost the entire length of the Paleozoic. Because they were mobile animals, they tended to inhabit large, even global areas. They were also hard-shelled invertebrates, so they fossilized easily. These fossils are large enough to study without a microscope.
Other index fossils of this type include ammonites, crinoids, rugose corals, brachiopods, bryozoans, and mollusks. The USGS offers a more detailed list of invertebrate fossils (with scientific names only).
Small or Microscopic Fossils
Other major index fossils are small or microscopic, part of the floating plankton in the world ocean. These are handy because of their small size. They can be found even in small bits of rock, such as wellbore cuttings. Because their tiny bodies rained down all over the ocean, they can be found in all kinds of rocks. Therefore, the petroleum industry has made great use of index microfossils, and geologic time is broken down in quite fine detail by various schemes based on graptolites, fusulinids, diatoms, and radiolarians.
The rocks of the ocean floor are geologically young, as they are constantly subducted and recycled into the Earth's mantle. Thus, marine index fossils older than 200 million years are normally found in sedimentary strata on land in areas that were once covered by seas.
For terrestrial rocks, which form on land, regional or continental index fossils may include small rodents that evolve quickly, as well as larger animals that have wide geographic ranges. These form the basis of provincial time divisions.
Defining Ages, Epochs, Periods, and Eras
Index fossils are used in the formal architecture of geologic time for defining the ages, epochs, periods, and eras of the geologic time scale. Some of the boundaries of these subdivisions are defined by mass extinction events, like the Permian-Triassic extinction. The evidence for these events is found in the fossil record wherever there is a disappearance of major groups of species within a geologically short amount of time.
Related fossil types include the characteristic fossil, a fossil that belongs to a period but doesn't define it, and the guide fossil, one that helps narrow down a time range rather than nail it down.