Successive adaptive radiations have played a pivotal role in the evolution of biological diversity. The effects of adaptive radiation are often seen, but the underlying causes are difficult to disentangle and remain unclear. Here we examine directly the role of ecological opportunity and competition in driving genetic diversification. We use the common aerobic bacterium Pseudomonas fluorescens, which evolves rapidly under novel environmental conditions to generate a large repertoire of mutants. When provided with ecological opportunity (afforded by spatial structure), identical populations diversify morphologically, but when ecological opportunity is restricted there is no such divergence. In spatially structured environments, the evolution of variant morphs follows a predictable sequence and we show that competition among the newly evolved niche-specialists maintains this variation. These results demonstrate that the elementary processes of mutation and selection alone are sufficient to promote rapid proliferation of new designs and support the theory that trade-offs in competitive ability drive adaptive radiation.