It is critical to study factors that are important for origin and maintenance of biological diversity. A comparative approach involving a large number of populations is particularly useful. We use this approach to study the relationship between ecological factors and phenotypic diversity in Icelandic Arctic charr (Salvelinus alpinus). Numerous populations of small benthic charr have evolved in lava springs in Iceland. These charr appear morphologically similar, but differ in important morphological features related to feeding. We found a clear relationship between diversity in morphology, diet, and ecological factors among populations. In particular, there were clear differences in morphology and diet between fish coming from habitats where the lava spring flowed on as a stream compared to habitats where the lava spring flowed into a pond. Our study shows that ecological factors are important for the origin and maintenance of biological diversity. The relationship between phenotype and ecological factors are observed on a fine scale, when comparing numerous populations that are phenotypically similar. This strongly suggests that for understanding, managing, and conserving biological diversity important ecological variables have to be taken into the account.