Background: Debate continues as to whether allopatric speciation or peripatric speciation through a founder effect is the predominant force driving evolution in vertebrates. The mouse lemurs of Madagascar are a system in which evolution has generated a large number of species over a relatively recent time frame. Here, we examine speciation patterns in a pair of sister species of mouse lemur, Microcebus murinus and M. griseorufus. These two species have ranges that are disparately proportioned in size, with M. murinus showing a much more extensive range that marginally overlaps that of M. griseorufus. Given that these two species are sister taxa, the asymmetric but overlapping geographic ranges are consistent with a model of peripatric speciation. To test this hypothesis, we analyze DNA sequence data from four molecular markers using coalescent methods. If the peripatric speciation model is supported, we predict substantially greater genetic diversity in M. murinus, relative to M. griseorufus. Further, we expect a larger effective population size in M. murinus and in the common ancestor of the two species than in M. griseorufus, with a concomitant decrease in gene tree/species tree incongruence in the latter and weak signs of demographic expansion in M. murinus. Results: Our results reject a model of peripatric divergence. Coalescent effective population size estimates were similar for both extant species and larger than that estimated for their most recent common ancestor. Gene tree results show similar levels of incomplete lineage sorting within species with respect to the species tree, and locus-specific estimates of genetic diversity are concordant for both species. Multilocus demographic analyses suggest range expansions for M. murinus, with this species also experiencing more recent population declines over the past 160 thousand years. Conclusions: Results suggest that speciation occurred in allopatry from a common ancestor narrowly distributed throughout southwest Madagascar, with subsequent range expansion for M. murinus. Population decline in M. murinus is likely related to patterns of climate change in Madagascar throughout the Pleistocene, potentially exacerbated by continual anthropogenic perturbation. Genome-level data are needed to quantify the role of niche specialization and adaptation in shaping the current ranges of these species.