The endemic species richness on Madagascar, relative to landmass area, is unparalleled in the world. Many organisms on the island have restricted geographical ranges. A comprehensive hypothesis explaining the evolution of this microendemism has yet to be developed. Using an analysis of watersheds in the context of Quaternary climatic shifts, we provide a new mechanistic model to explain the process of explosive speciation on the island. River catchments with sources at relatively low elevations were zones of isolation and hence led to the speciation of locally endemic taxa, whereas those at higher elevations were zones of retreat and dispersion and hence contain proportionately lower levels of microendemism. These results provide a framework for biogeographic and phylogeographic studies, as well as a basis for prioritizing conservation actions of the remaining natural forest habitats on the island.

Conservation and development are intricately linked. The international donor community has long provided aid to tropical countries in an effort to alleviate poverty and conserve biodiversity. While hundreds of millions of $ have been invested in over 500 environmental-based projects in Madagascar during the period covered by a series of National Environmental Action Plans (1993–2008) and the protected areas network has expanded threefold, deforestation remains unchecked and none of the eight Millennium Development Goals (MDGs) established for 2000–2015 were likely be met. Efforts to achieve sustainable development had failed to reduce poverty or deliver progress toward any of the MDGs. Cross-sectorial policy adjustments are needed that (i) enable and catalyze Madagascar’s capacities rather than deepening dependency on external actors such as the World Bank, the International Monetary Fund and donor countries, and that (ii) deliver improvements to the livelihoods and wellbeing of the country’s rural poor.