We studied the speciose butterfly genus Erebia by reconstructing its phylogenetic relationships using parsimony and Bayesian approaches. We estimated times and rates of diversification for its lineages and employed a biogeographical analysis in order to reconstruct its evolutionary history. DNA sequence data from one mitochondrial gene and three nuclear genes were analyzed for a total of 74 species in Erebia. The estimated dates of origin and diversification for clades, in combination with a biogeographical analysis, suggest that the genus originated in Asian Russia and started its diversification process around 23 Myr. An important event was the dispersal of a lineage from Asia to Western Europe between 23 and 17 Myr, which allowed the radiation of most of species in the genus. The diversification pattern is consistent with a model of diversity limited by clade richness, which implies an early rapid diversification followed by deceleration due to a decrease in speciation. We argue that these characteristics of the evolutionary history of Erebia are consistent with a density-dependent scenario, with species radiation limited by filling of niche space and reduced resources. We found that the Boeberia parmenio appears strongly supported in the genus Erebia and therefore we place Boeberia Prout, 1901 as a junior synonym of Erebia Dalman, 1816 (syn. nov.).