The Strigopidae are an ancient parrot (Psittaciformes) family consisting of three extant species placed in two genera (Nestor, Strigops) and restricted to New Zealand. Their evolutionary history is clouded because the timing of divergence events within this family has variously been attributed to Pleistocene climate change or much earlier earth-historic events. Here we examine new psittaciform DNA sequence data, and combine them with previously published sequences, to shed light on the poorly understood timing of diversification within the Strigopidae. Using calibrations indirectly derived from both psittaciform and non-psittaciform fossils, our data indicate a Late Pliocene or Early Pleistocene (ca 1.2–3.6 mya) differentiation between the two Nestor species (kea and kaka), possibly in response to shifts in habitat distribution associated with sea level fluctuations. The unique, monotypic, nocturnal and flightless genus Strigops (kakapo) is shown to have diverged from the Nestor lineage probably ca 28–29 mya, coinciding with the potential Oligocene submergence of Zealandia when much of its landmass may have been fragmented into smaller islands, providing a setting for allopatric diversification.