We use genetic divergence at 16 microsatellite loci to investigate how geographical features of the Galápagos landscape structure island populations of Darwin's finches. We compare the three most genetically divergent groups of Darwin's finches comprising morphologically and ecologically similar allopatric populations: the cactus finches (Geospiza scandens and Geospiza conirostris), the sharp-beaked ground finches (Geospiza difficilis) and the warbler finches (Certhidea olivacea and Certhidea fusca). Evidence of reduced genetic diversity due to drift was limited to warbler finches on small, peripheral islands. Evidence of low levels of recent interisland migration was widespread throughout all three groups. The hypothesis of distance-limited dispersal received the strongest support in cactus and sharp-beaked ground finches as evidenced by patterns of isolation by distance, while warbler finches showed a weaker relationship. Support for the hypothesis that gene flow constrains morphological divergence was only found in one of eight comparisons within these groups. Among warbler finches, genetic divergence was relatively high while phenotypic divergence was low, implicating stabilizing selection rather than constraint due to gene flow. We conclude that the adaptive radiation of Darwin's finches has occurred in the presence of ongoing but low levels of gene flow caused by distance-dependent interisland dispersal. Gene flow does not constrain phenotypic divergence, but may augment genetic variation and facilitate evolution due to natural selection. Both microsatellites and mtDNA agree in that subsets of peripheral populations of two older groups are genetically more similar to other species that underwent dramatic morphological change. The apparent decoupling of morphological and molecular evolution may be accounted for by a modification of Lack's two-stage model of speciation: relative ecological stasis in allopatry followed by secondary contact, ecological interactions and asymmetric phenotypic divergence.