Lichens exhibit varying degrees of specialization with regard to the surfaces they colonize, ranging from substrate generalists to strict substrate specialists. Though long recognized, the causes and consequences of substrate specialization are poorly known. Using a phylogeny of a 150-200 MYA clade of lichen fungi, we asked whether substrate niche is phylogenetically conserved, which substrates are ancestral, whether specialists arise from generalists or vice versa, and how specialization affects speciation/extinction processes. We found strong phylogenetic signal for niche conservatism. Specialists evolved into generalists and back again, but transitions from generalism to specialism were more common than the reverse. Our models suggest that for this group of fungi, “escape” from specialization for soil, rock and bark occurred, but specialization for wood foreclosed evolution away from that substrate type. In parallel, speciation models showed positive diversification rates for soil and rock dwellers but not other specialists. Patterns in the studied group suggest that fungal substrate specificity is a key determinant of evolutionary trajectory for the entire lichen symbiosis.