The mountains of South America are hotspots of plant diversity. How this diversity originated and evolved, and what roles geographic and environmental factors may have played in the diversification of lineages occurring in these regions is not well understood. Escallonia, a morphologically and ecologically diverse group of shrubs and trees widely distributed in these mountains, provides an ideal opportunity for studying the historical underpinnings that have shaped the extraordinarily distinctive, diverse, and endangered flora of these regions, and for evaluating the role of abiotic factors in the process of lineage divergence. I analyzed neutral DNA sequence data from two nuclear loci and one chloroplast locus using maximum parsimony, maximum likelihood, and Bayesian phylogenetic approaches. I used a Bayesian approach to analyze the geographic structure of gene trees, and a phylogenetically controlled decomposition of the variance in bioclimatic variables to analyze the eco-climatic structure of gene trees. I found i) that Escallonia is monophyletic, ii) a remarkable level of geographical and climatic phylogenetic structure, iii) that Escallonia likely originated in the tropical Andes, and iv) a widespread absence of species exclusivity. Geography played an important role early on the history of Escallonia by separating populations that later diversify likely in isolation. Although geographic isolation was generally accompanied by changes in climate, it is not clear whether environmental gradients along elevation have influenced more recent diversification events, or species have evolved broader environmental tolerances.