The idea that populations must be geographically isolated (allopatric) to evolve into separate species has persisted for a long time. It is now clear that new species can also diverge despite ongoing genetic exchange, but few accepted cases of speciation in sympatry have held up when scrutinised using modern approaches. Here, we examined evidence for speciation of the Howea palms of Lord Howe Island, Australia, in light of new genomic data. We used coalescence-based demographic models combined with double digest restriction-site associated DNA sequencing of multiple individuals and provide support for previous claims by Savolainen et al. (Nature 441: 210–213, 2006) that speciation in Howea did occur in the face of gene flow.