Understanding the processes underlying the origin of species is a fundamental goal of biology. It is widely accepted that speciation requires an interruption of gene flow between populations: ongoing gene exchange is considered a major hindrance to population divergence and, ultimately, to the evolution of new species. Where a geographic barrier to reproductive isolation is lacking, a biological mechanism for speciation is required to counterbalance the homogenizing effect of gene flow. Speciation with initially strong gene flow is thought to be extremely rare, and few convincing empirical examples have been published. However, using phylogenetic, karyological, and ecological data for the flora of a minute oceanic island (Lord Howe Island, LHI), we demonstrate that speciation with gene flow may, in fact, be frequent in some instances and could account for one in five of the endemic plant species of LHI. We present 11 potential instances of species divergence with gene flow, including an in situ radiation of five species of Coprosma (Rubiaceae, the coffee family). These results, together with the speciation of Howea palms on LHI, challenge current views on the origin of species diversity.