Adaptation to contrasting environments across a heterogeneous landscape favors the formation of ecotypes by promoting ecological divergence. Patterns of fitness variation in the field can show whether natural selection drives local adaptation and ecotype formation. However, to demonstrate a link between ecological divergence and speciation, local adaptation must have consequences for reproductive isolation. Using contrasting ecotypes of an Australian wildflower, Senecio lautus in common garden experiments, hybridization experiments, and reciprocal transplants, we assessed how the environment shapes patterns of adaptation and the consequences of adaptive divergence for reproductive isolation. Local adaptation was strong between ecotypes, but weaker between populations of the same ecotype. F1 hybrids exhibited heterosis, but crosses involving one native parent performed better than those with two foreign parents. In a common garden experiment, F2 hybrids exhibited reduced fitness compared to parentals and F1 hybrids, suggesting that few genetic incompatibilities have accumulated between populations adapted to contrasting environments. Our results show how ecological differences across the landscape have created complex patterns of local adaptation and reproductive isolation, suggesting that divergent natural selection has played a fundamental role in the early stages of species diversification.