The high biodiversity in tropical seas provides a long-standing challenge to allopatric speciation models. Physical barriers are few in the ocean and larval dispersal is often extensive, a combination that should reduce opportunities for speciation. Yet coral reefs are among the most species-rich habitats in the world, indicating evolutionary processes beyond conventional allopatry. In a survey of mtDNA sequences of five congeneric west Atlantic reef fishes (wrasses, genus Halichoeres ) with similar dispersal potential, we observed phylogeographical patterns that contradict expectations of geographical isolation, and instead indicate a role for ecological speciation. In Halichoeres bivittatus and the species pair Halichoeres radiatus / brasiliensis , we observed strong partitions (3.4% and 2.3% divergence, respectively) between adjacent and ecologically distinct habitats, but high genetic connectivity between similar habitats separated by thousands of kilometres. This habitat partitioning is maintained even at a local scale where H. bivittatus lineages are segregated between cold- and warm-water habitats in both Bermuda and Florida. The concordance of evolutionary partitions with habitat types, rather than conventional biogeographical barriers, indicates parapatric ecological speciation, in which adaptation to alternative environmental conditions in adjacent locations overwhelms the homogenizing effect of dispersal. This mechanism can explain the long-standing enigma of high biodiversity in coral reef faunas.