Specialisms on resources and for niches, leading to specialization, have been construed to be tantamount to speciation and vice versa, while the occurrence of true generalism in nature has also been questioned. We argue that generalism in resource use, biotope occupancy, and niche breadth not only exists, but also forms a crucial part in the evolution of specialists, representing a vital force in speciation and a more effective insurance against extinction. We model the part played by generalism and specialism in speciation and illustrate how a balance may be maintained between the number of specialists and generalists within taxa. The balance occurs as an ongoing cycle arising from turnover in the production of specialists and generalists, speciation, and species extinction. The nature of the balance depends on the type of resources exploited, biotopes, and niche space occupied. These vary between different regions and create taxonomic biases towards generalists or specialists. We envisage that the process may be sympatric/parapatric, although it is more likely initiated by allopatry driven by abiotic forces. © 2011 The Linnean Society of London, Biological Journal of the Linnean Society, 2011, 104, 725–737.