Genetic analyses can reveal a wealth of hitherto undiscovered cryptic biodiversity. For co-occurring and morphologically similar species, the combination of molecular, ecological and morphological analyses provides an excellent opportunity for understanding some of the processes that can lead to divergence and speciation. The Australian endemic brown macroalga Durvillaea potatorum (Phaeophyceae) was examined with a combination of genetic and morphological approaches to confirm the presence of two separate species and to infer the processes that led to their divergence. A total of 331 individuals from 11 sites around coastal Tasmania were collected and measured in situ for a range of morphological and ecological characteristics. Tissue samples were also collected for each individual to allow genetic analyses using mitochondrial (COI) and nuclear (28S) markers. Genetic analyses confirmed the presence of two deeply divergent clades. The significant morphological differentiation, despite high levels of intra-lineage variability, further supported their recognition as distinct species. We describe a new species, D. amatheiae sp. nov., which is characterised by a narrower and proportionately shorter stipe, shorter total length, and higher number of stipitate lateral blades and branches than D. potatorum (sensu stricto). The occurrence of both species in sympatry along Tasmania's eastern and western coasts, as well as their contrasting patterns of haplotype diversity, supports a hypothesis of geographical isolation, allopatric speciation and subsequent secondary contact in response to sea level and ocean current change throughout the Pleistocene glaciation cycles. This research contributes to resolving the phylogenetic relationships, taxonomy and evolution of the ecologically keystone kelp genus Durvillaea.