Abstract A key debate in ecology centres on the relative importance of niche and neutral processes in determining patterns of community assembly with particular focus on whether ecologically similar species with similar functional traits are able to coexist. Meanwhile, molecular studies are increasingly revealing morphologically indistinguishable cryptic species with presumably similar ecological roles. Determining the geographic distribution of such cryptic species provides opportunities to contrast predictions of niche vs. neutral models. Discovery of sympatric cryptic species increases alpha diversity and supports neutral models, while documentation of allopatric/parapatric cryptic species increases beta diversity and supports niche models. We tested these predictions using morphological and molecular data, coupled with environmental niche modelling analyses, of a fig wasp community along its 2700‐km latitudinal range. Molecular methods increased previous species diversity estimates from eight to eleven species, revealing morphologically cryptic species in each of the four wasp genera studied. Congeneric species pairs that were differentiated by a key morphological functional trait (ovipositor length) coexisted sympatrically over large areas. In contrast, morphologically similar species, with similar ovipositor lengths, typically showed parapatric ranges with very little overlap. Despite parapatric ranges, environmental niche models of cryptic congeneric pairs indicate large regions of potential sympatry, suggesting that competitive processes are important in determining the distributions of ecologically similar species. Niche processes appear to structure this insect community, and cryptic diversity may typically contribute mostly to beta rather than alpha diversity.