The phylogeographical and systematic relationships among species in the tropical marine fish genus Dascyllus were inferred using mitochondrial DNA (mtDNA) sequence data. Although our results were generally consistent with previously published phylogenies based on both morphological and mitochondrial data, our broad taxonomic and geographical sampling design revealed novel insights into the phylogenetic history of Dascyllus that had escaped previous notice. These results include: (a) the polyphyletic nature of D. reticulatus mtDNAs, representing two divergent and geographically separated lineages, one shared with D. flavicaudus and the second forming the sister lineage of D. carneus; (b) the paraphyly of D. trimaculatus relative to the closely related D. abisella; and (c) phylogeographical structure within the widespread taxa D. aruanus and D. trimaculatus. Application of a molecular clock permits us to posit a causative role for tectonic and oceanic changes regarding some Dascyllus speciation events. Finally, we mapped body size and the presence or absence of protogynous sex change on the mtDNA tree, and tested published hypotheses regarding determinants of the evolution of mating system and protogyny in the genus. Our data rejected a model based on body size but not one based on phylogenetic inertia. The ability to change sex arose once in the ancestor to the entire genus, and was lost once in the ancestor of the D. trimaculatus complex. For taxa that are as geographically widespread as many Indo-Pacific genera, this study highlights the importance of adequate geographical sampling when inferring patterns of species diversification and life history evolution.