The growing body of empirical evidence for sympatric speciation has been complemented by recent theoretical treatments that have identified evolutionary conditions conducive to speciation in sympatry. The Neotropical Midas cichlid (Amphilophus citrinellum) fits both of the key characteristics of these models, with strong assortative mating on the basis of a colour polymorphism coupled with trophic and ecological differentiation derived from a polymorphism in their pharyngeal jaws. We used microsatellite markers and a 480 bp fragment of the mitochondrial DNA control region to study four polymorphic populations of the Midas cichlid from three crater lakes and one large lake in Nicaragua in an investigation of incipient sympatric speciation. All populations were strongly genetically differentiated on the basis of geography. We identified strong genetic separation based on colour polymorphism for populations from Lake Nicaragua and one crater lake (Lake Apoyo), but failed to find significant genetic structuring based on trophic differences and ecological niche separation in any of the four populations studied. These data support the idea that sexual selection through assortative mating contributes more strongly or earlier during speciation in sympatry than ecological separation in these cichlids. The long-term persistence of divergent cichlid ecotypes (as measured by the percentage sequence divergence between populations) in Central American crater lakes, despite a lack of fixed genetic differentiation, differs strikingly from the patterns of extremely rapid speciation in the cichlids in Africa, including its crater lakes. It is unclear whether extrinsic environmental factors or intrinsic biological differences, e.g. in the degree of phenotypic plasticity, promote different mechanisms and thereby rates of speciation of cichlid fishes from the Old and New Worlds.