The Australo-Papuan Meliphaga honeyeaters have diversified over a wide range of habitats and elevational zones and are one of the few regionally known cryptic avian radiations. Using a combined 1580 bp of mitochondrial and nuclear DNA we investigate the species limits, systematic affinities and biogeographic history of Meliphaga. We also investigate the role of spatial sorting mechanisms, including altitudinal replacement and niche partitioning, as mechanisms underlying the adaptive radiation of this group. Phylogenetic analysis indicates that the genus Meliphaga comprises at least 16 species, three more than recognized in current classifications. The genus divides into two clades; the species-poor lewinii group, and the larger analoga group that has diversified into a wider range of vertical, vegetational and elevational niches. The basal division of each clade into an Australian and New Guinean assemblage was likely induced by the formation of the Arafura Sea during the early Pliocene ( approximately 4 MYA) with a single reinvasion of Australia by the open forest species M. gracilis during the early Pleistocene (1.2-1.5 MYA) via intermittent land bridges or island hopping. Most recent sister species were found to replace each other geographically within the same ecological and elevational zone conforming to the classical allopatric mode of speciation. In contrast, M. orientalis (650-1950 m) and M. analoga (0-1100 m) were found to replace each other altitudinally across ecological zones providing empirical support for altitudinal speciation as a mechanism of diversification in a montane avifauna. We find no evidence of sympatric speciation (co-existing sister lineages) and suggest that spatial segregation within the habitat (niche partitioning) is primarily a mechanism enabling more divergent species to coexist.