The Balkan Peninsula represents an important center of plant diversity, exhibiting remarkable ecological heterogeneity that renders it an optimal region for studying the diversification patterns of complex taxa such as Teucrium montanum. In the Balkan Peninsula, T. montanum is a highly plastic and morphologically variable species with unresolved taxonomic status. To ascertain the patterns of genetic and morphological diversification, a comparative genetic and morphological analysis was conducted. In total, 57 populations were subjected to analysis using AFLP and a multivariate morphometric approach. A Bayesian analysis of population structure distinguished two main genetic clusters, labelled A and B. Cluster B was found to be geographically restricted to the northwestern Dinarides, while cluster A occurred in the rest of the Balkans. Genetic cluster A was further subdivided into four subclusters that were spatially separated from each other. The contact populations between the subclusters exhibited a mixed genetic structure. There was a partial correlation between genetic and morphological diversification. The peripheral populations of the genetic clusters displayed morphological differences, while both genetic and morphological differences decreased in the contact zones. The observed genetic structure can be attributed to the reproductive biology of this species and the complex geological history of the Balkan Peninsula.