Although theory predicts that dispersal has a pivotal influence on speciation and extinction rates, it can have contradictory effects on each, such that empirical quantification of its role is required. In many studies, dispersal reduction appears to promote diversification, although some comparisons of migratory and nonmigratory species suggest otherwise. We tested for a relationship between migratory status and diversification rate within the dominant radiation of temperate Southern Hemisphere freshwater fishes, the Galaxiidae. We reconstructed a molecular phylogeny comprising >95% of extant taxa, and applied State‐dependent Speciation Extinction models to estimate speciation, extinction, and diversification rates. In contrast to some previous studies, we revealed higher diversification rates in nonmigratory lineages. The reduced gene flow experienced by nonmigratory galaxiids appears to have increased diversification under conditions of allopatry or local adaptation. Migratory galaxiid lineages, by contrast, are genetically homogeneous within landmasses, but may also be rarely able to diversify by colonizing other landmasses in the temperate Southern Hemisphere. Apparent contradictions among studies of dispersal‐diversification relationships may be explained by the spatial context of study systems relative to species dispersal abilities, by means of the “intermediate dispersal” model; the accurate quantification of dispersal abilities will aid in the understanding of these proposed interactions.