Snubnose gobies (genus Pseudogobius: Gobionellinae) are ubiquitous to, and important components of, estuarine ecosystems of the Indo-west Pacific. These small benthic fishes occur in freshwater, brackish and marine habitats such as mangroves, sheltered tide pools and lowland streams, and represent a model group for understanding the biodiversity and biogeography of estuarine fauna. To develop the species-level framework required for a concurrent morphological taxonomic appraisal, we undertook thorough sampling around the extensive Australian coastline, referenced to international locations, as part of a molecular systematic review using both nuclear and mitochondrial markers. The results indicate that while there are currently eight recognised species, the true diversity is close to double this, with a hotspot of endemism located in Australia. Complicated patterns were observed in southern Australia owing to two differing zones of introgression/admixture. Key drivers of diversity in the group appear to include plate tectonics, latitude, and historic barriers under glacial maxima, where an interplay between ready dispersal and habitat specialisation has led to regional panmixia but frequent geographic compartmentalisation within past and present landscapes. The findings have significant implications for biodiversity conservation, coastal and estuarine development, the basic foundations of field ecology, and for applied use such as in biomonitoring.