Although species radiations on island archipelagos are broadly studied, the geographic and ecological modes of speciation that underlie diversification are often not fully understood. Both allopatry and sympatry play a role during radiations, particularly on islands with profound habitat diversity. Here, we use the most diverse Canary Island plant radiation, Aeonium (Crassulaceae), to phylogenetically test two hypotheses: (1) allopatric speciation, which predicts that closely related taxa are ecologically similar but do not co-occur, and (2) sympatric speciation, whereby closely related taxa co-occur geographically but are ecologically distinct. We fitted niche and spatial distribution models based on extensive field surveys to quantify geographic and ecological divergence among taxa integrated in a phylogenetic context. While allopatry seems to be the main driver in speciation among islands, within-island speciation occurs in sympatry. Contrary to our expectation, phylogenetically closely related species tend to occupy similar ecological niches, suggesting that ecological niche divergence among species accumulates slowly, even in sympatry. This suggests that evolutionary young taxa, may be partially reproductively isolated due to subtle phenotypic differences, such as reproductive morphology and phenology rather than by ecology and may putatively exacerbate divergence among populations. Thus, allopatry and sympatry are complementary speciation mechanisms on oceanic islands, jointly spurring this enigmatic radiation.