Adaptive radiations have proven important for understanding the mechanisms and processes underlying biological diversity. The convergence of form and function, as well as admixture and adaptive introgression, are common in adaptive radiations. However, distinguishing between these two scenarios remains a challenge for evolutionary research. The Midas cichlid species complex (Amphilophus spp.) is a prime example of adaptive radiation, with phenotypic diversification occurring at various stages of genetic differentiation. One species, A. labiatus, has large fleshy lips, is associated with rocky lake substrates, and occurs patchily within Lakes Nicaragua and Managua. By contrast, the similar, but thin-lipped, congener, A. citrinellus, is more common and widespread. We investigated the evolutionary history of the large-lipped form, specifically regarding whether the trait has evolved independently in both lakes from ancestral thin-lipped populations, or via dispersal and/or admixture events. We collected samples from distinct locations in both lakes, and assessed differences in morphology and ecology. Using RAD-seq, we genotyped thousands of SNPs to measure population structure and divergence, demographic history, and admixture. We found significant between-species differences in ecology and morphology, local intraspecific differences in body shape and trophic traits, but only limited intraspecific variation in lip shape. Despite clear ecological differences, our genomic approach uncovered pervasive admixture between species and low genomic differentiation, with species within lakes being genetically more similar than species between lakes. Taken together, our results suggest a single origin of large-lips, followed by pervasive admixture and adaptive introgression, with morphology being driven by local ecological opportunities, despite on-going gene-flow.