Understanding phenotype variation is among the central topics in biology. We revise and reanalyze studies of the amphipod genus Niphargus to confront two potential mechanisms driving its phenotype variation, namely, cladogenesis and adaptive evolution. We found evidence for both mechanisms. Reanalysis of a subset of traits using molecular phylogeny showed moderate phylogenetic signal, consistent with the hypothesis that overall phylogenetic variation increases with phylogeny. The phylogenetic signal in Niphargus traits seems to be stronger at the tips of the phylogeny than at basal splits. Indirect evidence suggests that much of the phenotype variation can be attributed to adaptive evolution. Both lines of evidence are consistent with the hypothesis that Niphargus evolved in several adaptive radiations, where theory predicts that most of the phenotype variation evolves early, when ecological niches are vacant. As the niches fill up, the rate of phenotype variation slows down and becomes associated with cladogenetic events. This hypothesis can explain the high level of trait-convergence and unresolved taxonomy above the species level. The main caveats to these hypotheses comprise lack of experimental evidence for trait function and nonquantified heritable component of trait variation. Promising venues towards better understanding of phenotypic variation include studies of ontogenetic variation, functional interactions between traits, and genome–phenotype associations.