To gain insights into crystal–melt separation processes during basalt differentiation, we have studied an 8-m-thick pāhoehoe lava lobe from the Hafnarhraun lava flow field in SW Iceland. The lobe has abundant melt segregations, porous cylindrical and sheet-like structures, generally interpreted as separated residual melts of a lava lobe. We divide these melt segregations into three types based on morphology and composition: vesicle cylinders (VC), type 1 horizontal vesicle sheets (HVS1), and type 2 horizontal vesicle sheets (HVS2). Remarkably, the studied VC are not simple residual melts generated by fractional crystallization, but their composition points to removal of plagioclase from the parental lava. HVS1 resemble VC, but have fractionated more olivine (ol) + plagioclase (plg) ± augite and have lost most, if not all, of their olivine phenocrysts. HVS2 are Fe-rich and evolved, corresponding to residual melts after 50–60% fractional crystallization of the lobe. We suggest that the Hafnarhraun VC formed in a two-stage process. Firstly, VC forming residual melt and vapor detached as rising diapirs from ol+plg+melt+vapor mush near the lava base, and later, these VC diapirs accumulated ol phenocrysts and minor plg microphenocrysts in the lava core. HVS1 represent accumulations of VC to the viscous base of the solidifying upper crust of the lobe, and HVS2 formed as evolved vapor-saturated residual melts seeped into voids within the upper crust. Such vapor-aided differentiation, here documented for the Hafnarhraun lava, may also apply to shallow crustal magma storage zones, contributing to the formation of evolved basalts.