The factors causing spatial variation in species richness remain poorly known. In this study, factors affecting species richness of palms (Palmae/Arecaceae) were studied along the elevational gradient of New Guinea. Interpolated elevational ranges were calculated from a database of all known collections for 145 species in 32 genera. The amount of land area at different elevations greatly affects the species richness gradient. If assessed in equal-elevation bands species richness appears to decline monotonically, but when assessed in equal-area bands species richness shows a pronounced mid-elevation peak, due to the large proportion of lowlands in New Guinea. By randomising species ranges within the total elevational gradient for palms and accounting for area, we found the mid-elevation peak to be consistent with a mid-domain effect caused by the upper and lower limits to palm distribution. Our study illustrates the importance of accounting for area in macroecological studies of richness gradients and introduces a novel yet simple method for doing this through the use of equal-area bands. Together, the effect of area and the mid-domain effect explain the majority of variation in species richness of New Guinea palms. We support calls for the multivariate assessment of the mid-domain effect on an equal footing with other potential explanations of species richness.