The Indo-Pacific region has arguably been the most important area for the formulation of theories about biogeography and speciation, but modern studies of the tempo, mode and magnitude of diversification across this region are scarce. We study the biogeographic history and characterize levels of diversification in the wide-ranging passerine bird Erythropitta erythrogaster using molecular, phylogeographic and population genetics methods, as well as morphometric and plumage analyses. Our results suggest that E. erythrogaster colonized the Indo-Pacific during the Pleistocene in an eastward direction following a stepping stone pathway, and that sea-level fluctuations during the Pleistocene may have promoted gene flow only locally. A molecular species delimitation test suggests that several allopatric island populations of E. erythrogaster may be regarded as species. Most of these putative new species are further characterized by diagnostic differences in plumage. Our study reconfirms the E. erythrogaster complex as a 'great speciator': it represents a complex of up to 17 allopatrically distributed, reciprocally monophyletic and/or morphologically diagnosable species that originated during the Pleistocene. Our results support the view that observed latitudinal gradients of genetic divergence among avian sister species may have been affected by incomplete knowledge of taxonomic limits in tropical bird species.