This study produces a nearly comprehensive phylogeny for the marine gastropod group Cypraeidae (cowries) and uses this topology to examine diversification patterns in the tropics. The dataset is based on molecular sequence data from two mitochondrial genes and includes 210 evolutionary significant units (ESUs) from 170 recognized species (>80%). Systematics for the group is revised based on well-supported clades, and tree topology is generally consistent with previously proposed classification schemes. Three new genera are introduced (Cryptocypraea gen. nov, Palmulacypraea gen. nov, and Contradusta gen. nov) and two previous genera are resurrected (Perisserosa and Eclogavena). One new tribe is proposed (Bistolidini). Topologies produced by a range of transition:transversion (Ti:Tv) weighting schemes in parsimony are pooled and evaluated using maximum likelihood criteria. Extensive geographical coverage shows persistent, large-scale geographical structure in sister-groups. Genetic divergence between subspecies is often equivalent or even greater than that between recognized species. Using ESUs as a metric, diversity throughout the Indo-West Pacific (IWP) increases by 38%. Intra- and inter-regional diversification patterns show that the IWP is the centre for speciation in cowries. The other major tropical regions of the world are inhabited by a predominantly relictual fauna; from a cowrie's eye-view. Good dispersal ability begets larger ranges, increased extinction resistance and morphological stasis; whereas shorter larval duration results in smaller ranges, higher speciation rates, but also higher turnover. Larval duration and dispersal ability appear correlated with ocean productivity as taxa with longer-lived larvae are associated with oligotrophic conditions; whereas taxa with shorter larval durations are associated with eutrophic, continental conditions. This tendency is carried to the extreme in temperate or upwelling regions where a planktonic phase is completely lost and crawl-away larvae evolve multiple times. A strong phylogenetic trend supports these observations as lineages leading up to and including the derived Indo-West Pacific Erroneinae clade contain taxa predominantly restricted to continental habitats and have undergone the greatest evolutionary radiations in their respective regions. © 2003 The Linnean Society of London, Biological Journal of the Linnean Society, 2003, 79, 401– 459.