Abstract Aim The rise of the Isthmus of Panama and the formation of ‘geminate’ species pairs serves as an important model of allopatric speciation. However, to function as a model system, hypothesized geminates must first be shown to be each other’s closest living relatives. If the presence of cryptic taxa obscures true relationships, the biogeographical histories of transisthmian taxa are likely to be misinterpreted. We have therefore completed a phylogeographic survey of the transisthmian bivalve subgenus Acar in the genus Barbatia to characterize patterns of tropical American diversity and to place transisthmian taxa in a regional phylogeographic context. Location Tropical America. Methods Mitochondrial cytochrome c oxidase I (COI) and nuclear internal transcribed spacer (ITS) sequences were obtained from 233 specimens of Acar. Sequences were analysed using cladistic and Bayesian methods. Divergence times between species were inferred from net nucleotide divergences and a coalescence-based method. Results The survey revealed 22 COI clades that were also monophyletic at ITS, indicating that the taxonomy of Acar is potentially greater than a fivefold diversity underestimate. The lone previously recognized geminate [Barbatia (Acar) gradata and Barbatia (Acar) domingensis] is composed of 15 clades. Among the four transisthmian lineages identified, two diverged more than 14 Ma; the two other geminates split just prior to the time of final seaway closure. In addition to a fourfold increase in the number of known geminates, our data show that within-basin diversification has been more impressive, with one geminate splitting into five monophyletic clades in the Western Atlantic alone since seaway closure. Electron microscopy of the larval shells of specimens indicates that the transisthmian lineage with the greatest rate of post-Isthmian diversification possesses non-planktonic larvae, a life-history feature linked to high speciation rates. Main conclusions Our analyses revealed that the identities of geminate pairs split by the Isthmus of Panama were obscured by extremely high tropical American cryptic diversity. Although we have identified four geminates, only two appear to have been split by the Isthmus. Our uncovering of extensive post-Isthmian diversification is consistent with the palaeontological perspective that the final closure of the Central American Seaway was followed by high rates of subgeneric diversification, particularly in the tropical Western Atlantic.