There has been much controversy regarding the timing of speciation events in birds, and regarding the relative roles of natural and sexual selection in promoting speciation. Here, we investigate these issues using winter wrens (Troglodytes troglodytes), an unusual example of a passerine with a Holarctic distribution. Geographical variation has led to speculation that the western North American form Troglodytes troglodytes pacificus might be a distinct biological species compared to those in eastern North America (e.g. Troglodytes troglodytes hiemalis) and Eurasia. We located the first known area in which both forms can be found, often inhabiting neighbouring territories. Each male wren in this area sings either western or eastern song, and the differences in song are as distinct in the contact zone as they are in allopatry. The two singing types differ distinctly in mitochondrial DNA sequences and amplified fragment length polymorphism profiles. These results indicate that the two forms are reproductively isolated to a high degree where they co-occur and are therefore separate species. DNA variation suggests that the initial split between the two species occurred before the Pleistocene, quite long ago for sister species in the boreal forest. Surprisingly, the two forms are similar in morphometric traits and habitat characteristics of territories. These findings suggest that sexual selection played a larger role than habitat divergence in generating reproductive isolation, and raise the possibility that there are other such morphologically cryptic species pairs in North America.