Adaptive divergence in coloration is expected to produce reproductive isolation in species that use colourful signals in mate choice and species recognition. Indeed, many adaptive radiations are characterized by differentiation in colourful signals, suggesting that divergent selection acting on coloration may be an important component of speciation. Populations in the Anolis marmoratus species complex from the Caribbean island of Guadeloupe display striking divergence in the colour and pattern of adult males that occurs over small geographic distances, suggesting strong divergent selection. Here we test the hypothesis that divergence in coloration results in reduced gene flow among populations. We quantify variation in adult male coloration across a habitat gradient between mesic and xeric habitats, use a multilocus coalescent approach to infer historical demographic parameters of divergence, and examine gene flow and population structure using microsatellite variation. We find that colour variation evolved without geographic isolation and in the face of gene flow, consistent with strong divergent selection and that both ecological and sexual selection are implicated. However, we find no significant differentiation at microsatellite loci across populations, suggesting little reproductive isolation and high levels of contemporary gene exchange. Strong divergent selection on loci affecting coloration probably maintains clinal phenotypic variation despite high gene flow at neutral loci, supporting the notion of a porous genome in which adaptive portions of the genome remain fixed whereas neutral portions are homogenized by gene flow and recombination. We discuss the impact of these findings for studies of colour evolution and ecological speciation.