Prior studies of butterfly diversification in the Neotropics have focused on Amazonia and the tropical Andes, while southern regions of the continent have received little attention. To address the gap in knowledge about the Lepidoptera of temperate South America, we analyzed over 3,000 specimens representing nearly 500 species from Argentina for a segment of the mitochondrial COI gene. Representing 42% of the country’s butterfly fauna, collections targeted species from the Atlantic and Andean forests, biodiversity hotspots that were previously connected but are now isolated. We assessed COI effectiveness for species discrimination and identification and how its performance was affected by geographic distances and taxon coverage. COI data also allowed to study patterns of genetic variation across Argentina, particularly between populations in the Atlantic and Andean forests. Our results show that COI discriminates species well, but that identification success is reduced on average by ~20% as spatial and taxonomic coverage rises. We also found that levels of genetic variation are associated with species’ spatial distribution type, a pattern which might reflect differences in their dispersal and colonization abilities. In particular, intraspecific distance between populations in the Atlantic and Andean forests was significantly higher in species with disjunct distributions than in those with a continuous range. All splits between lineages in these forests dated to the Pleistocene, but divergence dates varied considerably, suggesting that historical connections between the Atlantic and Andean forests have differentially affected their shared butterfly fauna. Our study supports the fact that large-scale assessments of mitochondrial DNA variation are a powerful tool for evolutionary studies.