A 1.9-kilobase region of the period locus was sequenced in six individuals of Drosophila melanogaster and from six individuals of each of three sibling species: Drosophila simulans, Drosophila sechellia and Drosophila mauritiana. Extensive genealogical analysis of 174 polymorphic sites reveals a complex history. It appears that D. simulans, as a large population still segregating very old lineages, gave rise to the island species D. mauritiana and D. sechellia. Rather than considering these speciation events as having produced "sister" taxa, it seems more appropriate to consider D. simulans a parent species to D. sechellia and D. mauritiana. The order, in time, of these two phylogenetic events remains unclear. D. mauritiana supports a large number of polymorphisms, many of which are shared with D. simulans, and so appears to have begun and persisted as a large population. In contrast, D. sechellia has very little variation and seems to have experienced a severe population bottleneck. Alternatively, the low variation in D. sechellia could be due to recent directional selection and genetic hitchhiking at or near the per locus.