The peculiar lifestyle of subterranean reptiles must determine their modes of speciation and diversification. To further understand the evolutionary biology of subterranean reptiles, we studied the phylogeny of worm lizards of the genus Blanus and the phylogeography of its Iberian representatives. We used mitochondrial (ND4 and 16S rRNA) and nuclear (anonymous) partial gene sequences to resolve phylogenetic relationships within Blanus. The Eastern Mediterranean Blanus strauchi was recovered as sister group of Western Mediterranean species. Iberian and North African Blanus were recovered as reciprocally monophyletic groups. The same genes were used to determine phylogeography of 47 populations of Blanus cinereus. Mitochondrial and nuclear sequence data recovered two highly supported Iberian clades. Parapatry and high sequence divergences between them suggest that these clades may represent independent taxonomic units. A molecular clock was calibrated considering that the split between Iberian and North African Blanus was due to the re-opening of the Betic Strait in the Upper Tortonian (8–9 million years ago). Differentiation between the two Iberian clades was estimated to date back to 5.2 million years ago. The Central Iberian clade included five mitochondrial haplotype lineages (A–E). Geographical ranges of two of them broadly overlap in the central Iberian plateau. After testing alternative hypotheses, the most likely explanation for this striking phylogeographical pattern involves recent dispersal of one of the lineages (C) over the geographical range of the other (B). The inferred recent dispersal of this fossorial reptile is explained in terms of demographic advantages associated to underground lifestyle.