Speciation and the interactions between recently diverged species are thought to be major causes of ecological and morphological divergence in evolutionary radiations. We explored the role of these factors in the diversification of New World haemulid fishes, a major radiation of shore fishes in the tropical West Atlantic and East Pacific that are key members of coral reef ecosystems in this region. A time calibrated molecular phylogeny of this group reveals 21 sister species pairs, of which 8 are fully sympatric and 13 are allopatric. We find no difference between sympatric and allopatric pairs in the rate of divergence in color pattern, overall body shape or functional morphological traits associated with locomotion or feeding. However, sympatric pairs show a significant decrease in the rate of divergence in all of these traits with increasing time since their divergence, consistent with an elevated rate of divergence at the time of speciation, the effect of which attenuates as divergence time increases. Our results are consistent with an important role for speciation driving phenotypic divergence of haemulids, but the lack of difference in divergence between sympatric and allopatric pairs indicates that the interactions between closely related species are not dominant drivers of this divergence.