High-latitude diversification is a process characterized by speciation and extinction due to climatically driven vicariance and dispersal events. McKay's buntings (Plectrophenax hyperboreus) are high-latitude island endemic songbirds, and their global range is restricted to Beringia. Snow buntings (P. nivalis), their closest relatives, are distributed throughout the Holarctic, breeding in available habitat surrounding the island range of McKay's buntings. We sequenced 1123 base pairs of mitochondrial DNA for 40 individuals of each species and analyzed a total of 913 AFLPs for 57 individuals. Both marker types suggested weak but significant genetic differentiation. Analysis of sequence data indicated divergence occurring when the current breeding range of McKay's buntings was a hill on the Beringian steppe (~18,400 to ~73,700 years before present), suggesting that snow buntings were restricted to lower latitudes by ice sheets. Ancestral effective population size estimates indicate a founder event in McKay's buntings followed by an expansion and then a reduction in effective size. Rising sea levels and asymmetric hybridization from McKay's buntings into the postglacially-colonizing population of snow buntings could account for this reduction. Reproductive isolation is likely maintained through differential arrival dates on breeding grounds and the high breeding density of McKay's buntings. This recent, high-latitude divergence best fits a model of founder event speciation driven by vicariance and oscillations in habitat due to climate change.