Although sexual ornamentation mediates reproductive isolation, comparative evidence does not support the hypothesis that stronger sexual selection promotes speciation. Prior analyses have neglected the possibility that decreases in ornamentation may also promote speciation, such that both increases and decreases in the strength of sexual selection and associated changes in ornamentation promote speciation. To test this hypothesis, we studied color ornamentation in one of the largest and fastest avian radiations, the estrildid finches. We show that more ornamented lineages do not speciate more, even though they tend to have faster rates of ornamental evolution, whereas changes in ornamentation (i.e., increases or decreases) are associated with speciation. This indicates that divergence in sexually selected ornamentation, rather than stronger sexual selection, promotes or is otherwise associated with speciation. We also show that gregariousness and investment in reproduction are related to the elaboration of some ornamental traits, suggesting ecological influences on speciation mediated by ornamentation. We conclude that past work focusing specifically on the strength of sexual selection may have greatly underestimated the importance of sexual ornamentation for speciation.