Across Australia’s monsoon tropics and vast arid zone isolated regions or ‘islands’ of upland or rocky habitat are home to disjunct populations of many taxa of plants and animals. Comparative analyses of lineages that occur across these habitat islands provide opportunities to understand when and how environmental change drove isolation and diversification across arid Australia. Here we present an analysis of mitochondrial genetic diversity across disjunct populations of geckos in the Nephrurus asper group. Dating analyses suggest that disjunct and genetically divergent populations spanning the northern half of Australia diverged through the Plio–Pleistocene. Based on the timing of divergence and current habitat associations we hypothesise that species in this lineage were isolated by the expansion of unsuitable arid-zone habitats from the late Pliocene onwards. Across most areas, these barriers appear to be sandy or stony deserts. However, in eastern Australia genetically divergent populations are separated by grassland on flat vertisol-dominated soils (‘blacksoils’), suggesting that these habitats also expanded during the late Pliocene aridification. Finally, we show that western Queensland populations formerly referred to N. asper are genetically divergent and diagnosable on the basis of colour pattern and, herein, recognise these populations as a distinct species. https://zoobank.org/urn:lsid:zoobank.org:pub:9508CAAA-D014-452D-A3DA-325851615FA7