Abstract Geological, climate and ecosystem changes in Africa likely influenced speciation of Afrotropical freshwater crabs. In total, the subfamily Potamonautinae comprises over 120 species, and this diversity provides a valuable opportunity to explore speciation processes. Here we study diversification of potamonautid crabs in the Lake Malawi catchment, and investigate whether speciation has taken place across a lake-river boundary. Specifically, we reconstruct evolutionary relationships of the Malawi blue crab, Arcopotamonautes orbitospinus (Cunnington, 1907), an endemic of Lake Malawi, and of A. montivagus (Chace, 1953) from rivers and streams draining into Lake Malawi, and smaller lakes within this catchment. Our phylogenetic analysis of over 28,000 single nucleotide polymorphisms shows a monophyletic A. orbitospinus nested within a clade otherwise comprised of A. montivagus from across the Lake Malawi catchment (A. montivagus Group I). We also identified a second allopatric clade of A. montivagus from the Rungwe mountains of Tanzania, and neighbouring Zambia (A. montivagus Group II). Morphological differences were apparent between all three groups. Collectively these results show A. montivagus is a paraphyletic riverine taxon that has diversified in allopatry, and that this species entered Lake Malawi and seeded the specialised heavily armoured lacustrine species, A. orbitospinus. We hypothesise that formation of deep-water conditions within Lake Malawi, together with differences in predation pressures between the rivers and lake, provided ecological opportunities for natural selection to drive speciation across the lake-river boundary. We conclude that geographical separation and ecological adaptation are potentially important drivers of evolutionary diversification in these enigmatic freshwater crabs.