The nematode Caenorhabditis briggsae is a model for comparative developmental evolution with C. elegans. Worldwide collections of C. briggsae have implicated an intriguing history of divergence among genetic groups separated by latitude, or by restricted geography, that is being exploited to dissect the genetic basis to adaptive evolution and reproductive incompatibility; yet, the genomic scope and timing of population divergence is unclear. We performed high-coverage whole-genome sequencing of 37 wild isolates of the nematode C. briggsae and applied a pairwise sequentially Markovian coalescent (PSMC) model to 703 combinations of genomic haplotypes to draw inferences about population history, the genomic scope of natural selection, and to compare with 40 wild isolates of C. elegans. We estimate that a diaspora of at least six distinct C. briggsae lineages separated from one another approximately 200,000 generations ago, including the “Temperate” and “Tropical” phylogeographic groups that dominate most samples worldwide. Moreover, an ancient population split in its history approximately 2 million generations ago, coupled with only rare gene flow among lineage groups, validates this system as a model for incipient speciation. Low versus high recombination regions of the genome give distinct signatures of population size change through time, indicative of widespread effects of selection on highly linked portions of the genome owing to extreme inbreeding by self-fertilization. Analysis of functional mutations indicates that genomic context, owing to selection that acts on long linkage blocks, is a more important driver of population variation than are the functional attributes of the individually encoded genes.