The amount of information biological entities receive from and transmit to their environments (fittedness) influences their fitness and constrains the organization of the systems they constitute. The fittedness of an organism in an ecosystem modeled as a network of interacting organismal components (termed network fittedness) is measured by the diversity (strength and number) of its interactions with other components. Together, the fittedness of all ecosystem components is equal to the structural redundancy in the ecosystem. Redundancy is one part of the "overhead" by which the theoretically maximum organization of these pathways is reduced, thereby determining the actual degree of organization. Fittedness is hypothesized to increase or remain high early in network development because, in general, living entities must then deal with a more unpredictable environment. A hierarchical model of biological network development presented in terms of organisms and ecosystems shows how both network structural organization and the fittedness of components can increase through ecological and evolutionary time, if other parts of overhead decrease or the capacity of the system to process energy, matter, or information increases sufficiently. The model predicts the existence of a critical point when interacting components' shared environment is stabilized through boundary formation and the ecological replacement, evolution, and co-evolution of components, thereby allowing organismal fittedness to decrease and network organization to increase.