Abstract Invasive species demonstrate rapid evolution within a very short period of time allowing one to understand the underlying mechanism(s). Lantana camara, a highly invasive plant of the tropics and subtropics, has expanded its range and successfully established itself almost throughout India. In order to uncover the processes governing the invasion dynamics, 218 individuals from various locations across India were characterized with six microsatellites. By integrating genetic data with niche modelling, we examined the effect of drift and environmental selection on genetic divergence. We found multiple genetic clusters that were non-randomly distributed across space. Spatial autocorrelation revealed a strong fine-scale structure, i.e. isolation by distance. In addition, we obtained evidence of inhibitory effects of selection on gene flow, i.e. isolation by environmental distance. Perhaps, local adaptation in response to selection is offsetting gene flow and causing the populations to diverge. Niche models suggested that temperature and precipitation play a major role in the observed spatial distribution of this plant. Based on a non-random distribution of clusters, unequal gene flow among them and different bioclimatic niche requirements, we concluded that the emergence of ecotypes represented by two genetic clusters is underway. They may be locally adapted to specific climatic conditions, and perhaps at the very early stages of ecological divergence.