Rapid evolutionary radiations provide insight into the fundamental processes involved in species formation. Here we examine the diversification of one such group, the cichlid fishes of Lake Malawi, which have radiated from a single ancestor into more than 400 species over the past 700 000 years. The phylogenetic history of this group suggests: (i) that their divergence has proceeded in three major bursts of cladogenesis; and (ii) that different selective forces have dominated each cladogenic event. The first episode resulted in the divergence of two major lineages, the sand- and rock-dwellers, each adapted to a major benthic macrohabitat. Among the rock-dwellers, competition for trophic resources then drove a second burst of cladogenesis, which resulted in the differentiation of trophic morphology. The third episode of cladogenesis is associated with differentiation of male nuptial colouration, most likely in response to divergent sexual selection. We discuss models of speciation in relation to this observed pattern. We advocate a model, divergence with gene flow, which reconciles the disparate selective forces responsible for the diversification of this group and suggest that the nonadaptive nature of the tertiary episode has significantly contributed to the extraordinary species richness of this group.