Isolated islands, due to the reduced interspecific competition compared to mainland habitats, present ecological opportunities for colonizing lineages. As a consequence, island lineages may be expected to experience higher rates of trait evolution than mainland lineages. However, island effects on key life-history traits of vascular plants remain underexplored at broad spatiotemporal scales, even for emblematic island clades such as palms. Here, we used phylogenetic comparative methods to evaluate potential differences in size and macroevolutionary patterns of height and fruit diameter among mainland, continental, and volcanic island palms. Further, phylogenetic beta-diversity was used to determine if lineage turnover supported an adaptive radiation scenario on volcanic islands. Volcanic island palms were taller than their continental island and mainland counterparts, whereas continental island palms exhibited smaller fruit size. Height and fruit size of palms evolved under evolutionary constraints towards an optimal value. However, scenarios of adaptive radiation and niche conservatism were not supported for the height and fruit size of volcanic and mainland palm clades, respectively, as expected. Instead, continental island palms exhibited higher evolutionary rates for height and fruit size. Insular palm assemblages (continental and volcanic) are composed of unique lineages. Beyond representing evolutionary sources of new palm lineages, our results demonstrate that insular habitats are important in shaping palm trait diversity. Also, the higher phenotypic evolutionary rates of continental island palms suggest disparate selection pressures on this habitat type, which can be an important driver of trait diversification over time. Taken together, these results stress the importance of insular habitats for conservation of functional, phylogenetic, and taxonomic diversity of palms.