The process of reproductive character displacement involves divergence and/or the narrowing of variance in traits involved in species recognition, driven by interactions between taxa. However, stabilizing sexual selection may favor stasis and species similarity in these same traits if signals are optimized for transmission through the prevailing environment. Further, sexual selection may promote increased variability within species to facilitate individual recognition. Here we ask how the conflicting selection pressures of species recognition and sexual selection are resolved in a genus of Himalayan birds that sing exceptionally similar songs. We experimentally show that small differences in two traits (note shape and peak frequency) are both necessary and sufficient for species recognition. Song frequency shows remarkable clinal variation along the Himalayan elevational gradient, being most divergent where species co-occur, the classic signature of reproductive character displacement. Note shape shows no such clinal variation but varies more between individuals of an allopatric species than it does among individuals within species which co-occur. We argue that the different note shapes experience similar transmission constraints, and differences produced through species interactions spread back through the entire species range. Our results imply that reproductive character displacement is likely to be common.