Since their discovery at the turn of the century, the species assemblages of cichlid fishes in the East African Lakes Victoria, Malawi and Tanganyika have fascinated evolutionary biologists. Many models have attempted to account for the 'explosive' evolution of several hundred species within these lakes. Here we report a case of surprisingly large genetic divergence among populations of the endemic Tropheus lineage of Lake Tanganyika. This lineage of six species contains twice as much genetic variation as the entire morphologically highly diverse cichlid assemblage of Lake Malawi and six times more variation than the Lake Victoria species flock. Although it is highly variable in coloration, this group of species and its closest relatives have not undergone appreciable morphological change. The observed geographic pattern of genetic variation suggests that major lake level fluctuations affected the distribution and speciation of this lineage of cichlid fishes.