Trypanosoma cruzi, the etiological agent of Chagas disease, is highly genetically diverse. Numerous lines of evidence point to the existence of six stable genetic lineages or DTUs: TcI, TcIIa, TcIIb, TcIIc, TcIId, and TcIIe. Molecular dating suggests that T. cruzi is likely to have been an endemic infection of neotropical mammalian fauna for many millions of years. Here we have applied a panel of 49 polymorphic microsatellite markers developed from the online T. cruzi genome to document genetic diversity among 53 isolates belonging to TcIIc, a lineage so far recorded almost exclusively in silvatic transmission cycles but increasingly a potential source of human infection. These data are complemented by parallel analysis of sequence variation in a fragment of the glucose-6-phosphate isomerase gene. New isolates confirm that TcIIc is associated with terrestrial transmission cycles and armadillo reservoir hosts, and demonstrate that TcIIc is far more widespread than previously thought, with a distribution at least from Western Venezuela to the Argentine Chaco. We show that TcIIc is truly a discrete T. cruzi lineage, that it could have an ancient origin and that diversity occurs within the terrestrial niche independently of the host species. We also show that spatial structure among TcIIc isolates from its principal host, the armadillo Dasypus novemcinctus, is greater than that among TcI from Didelphis spp. opossums and link this observation to differences in ecology of their respective niches. Homozygosity in TcIIc populations and some linkage indices indicate the possibility of recombination but cannot yet be effectively discriminated from a high genome-wide frequency of gene conversion. Finally, we suggest that the derived TcIIc population genetic data have a vital role in determining the origin of the epidemiologically important hybrid lineages TcIId and TcIIe.