Fossils and genes represent two principal sources of data for studying evolutionary biology, but they are rarely unified. The aim of this paper is to integrate the fossil and molecular records of Tropical American cupuladriid bryozoans to elucidate their evolutionary history. Molecules and fossils broadly concur in determining the timing of species divergences, and point to seaway constriction associated with the emergence of the Isthmus of Panama as a driver of speciation. We discover that although cross-Isthmian isolation of taxa was important, strong isolating mechanisms also existed within the southwestern Caribbean (SWC), caused by increasing physical and environmental heterogeneity as inter-oceanic straits constricted in the Late Pliocene. During this time of rapid environmental change and instability, recently diverged species pairs existed in locally separated habitats for around 2 million years, only to co-exist after final closure of the seaway. This pattern is consistent with a model of allopatric speciation caused by local isolating mechanisms followed by secondary contact. Fossils also reveal the trajectories of reproductive life history and morphology during and after species divergences. In the SWC, all extant species started to shift from clonal to aclonal reproduction immediately in response to changing oceanographic conditions. However, it took another million years for colonies to gain skeletal strength, a trait that reduces cloning by fragmentation, suggesting that the appearance of advantageous traits was delayed by 1-2 million years and only arose after the process of allopatric speciation had run its course. Changes in colony shape, height and size also appear to lag 2 million years, but may reflect exploitation of the diverse sedimentary environments created as reefs proliferated at this time.