The phylogeography of the lacertid lizard Gallotia atlantica from the small volcanic island of Lanzarote (Canary Islands) was analysed based on 1075 bp of mitochondrial DNA (mtDNA) sequence (partial cytochrome b and ND2) for 157 individuals from 27 sites (including three sites from neighbouring islets). Levels of sequence divergence were generally low, with the most distant haplotypes separated by only 14 mutational steps. MtDNA divergence appears to coincide with formation of the middle Pleistocene lowland that united formerly separate ancient islands to form the current island of Lanzarote, allowing rejection of a two-island model of phylogeographical structure. There was evidence of large-scale population expansion after island unification, consistent with the colonization of new areas. A nested clade phylogeographical analysis (NCPA) revealed significant phylogeographical structuring. Two-step and higher-level clades each had disjunct distributions, being found to the east and west of a common area with a north–south orientation that extends between coasts in the centre-east of the island (El Jable). Other clades were almost entirely restricted to the El Jable region alone. Bayesian Markov chain Monte Carlo analyses were used to separate ongoing gene flow from historical associations. These supported the NCPA by indicating recent (75 000–150 000 years ago) east–west vicariance across the El Jable region. Lava flows covered El Jable and other parts of the central lowland at this time and likely led to population extinctions and temporary dispersal barriers, although present-day evidence suggests some populations would have survived in small refugia. Expansion of the latter appears to explain the presence of a clade located between the eastern and western components of the disjunct clades. Direct relationships between mtDNA lineages and morphology were not found, although one of two morphological forms on the island has a disjunct distribution that is broadly concordant with east–west components of the phylogeographical pattern. This work demonstrates how recent volcanic activity can cause population fragmentation and thus shape genetic diversity on microgeographical scales.