Aim: Despite the influence of sea-level changes on biogeographic/phylogeographic patterns in freshwater ecosystems being well documented, studies that explicitly link the influence of sea-level change with speciation are rare. We aim to test the hypothesis that sea-level changes during the Pliocene and Pleistocene have driven speciation in north-western Australia's (NWA’s) largest freshwater fish family, Terapontidae, building upon a body of evolutionary literature focussed on the family. Location: North-western Australian rivers including those draining the Kimberley Plateau. Taxon: Grunters (Family: Terapontidae, Genera: Hannia, Hephaestus, Leiopotherapon, Syncomistes). Methods: A GIS was used to reconstruct palaeodrainages during lowered sea levels and to delineate regions of high connectivity during low and high (current) sea-level conditions. For seven species, the degree of phylogenetic divergence among river basins in different regions was evaluated using a maximum likelihood phylogeny and analyses of the proportion of genetic divergence expressed with 601 base pairs of the mtDNA cytochrome b (cytb) gene. Results: A low proportion of cytb haplotypes were shared among catchments not connected by the same receiving waters (e.g. estuaries) under current (high) sea levels, indicating that contemporary dispersal is limited over fine spatial scales. Deeper phylogeographic patterns were largely congruent with reconstructed low sea-level (LSL) drainage arrangements indicating that historic among-catchment connectivity was far more widespread under LSL conditions. Main Conclusions: The NWA landscape represents a geographic template that has shaped patterns of broad dispersal under low sea levels, and fine-scale isolation under high sea levels. The weight of evidence from recent literature on species boundaries and evolutionary patterns within the terapontids suggests that most NWA species were derived rapidly and recently from a series of spatio-temporal vicariant events caused by such sea-level fluctuations during the late Pliocene and Pleistocene. Together, the findings provide a rare, comprehensively tested example of sea-level change driving speciation in the tropics.