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Coral reefs are the epitome of species diversity, yet the number of described scleractinian coral species, the framework-builders of coral reefs, remains moderate by comparison. DNA sequencing studies are rapidly challenging this notion by exposing a wealth of undescribed diversity, but the evolutionary and ecological significance of this diversity remains largely unclear. Here, we present an annotated genome for one of the most ubiquitous corals in the Indo-Pacific (Pachyseris speciosa), and uncover through a comprehensive genomic and phenotypic assessment that it comprises morphologically indistinguishable, but ecologically divergent cryptic lineages. Demographic modelling based on whole-genome resequencing disproved that morphological crypsis was due to recent divergence, and instead indicated ancient morphological stasis. Although the lineages occur sympatrically across shallow and mesophotic habitats, extensive genotyping using a rapid diagnostic assay revealed differentiation of their ecological distributions. Leveraging “common garden” conditions facilitated by the overlapping distributions, we assessed physiological and quantitative skeletal traits and demonstrated concurrent phenotypic differentiation. Lastly, spawning observations of genotyped colonies highlighted the potential role of temporal reproductive isolation in the limited admixture, with consistent genomic signatures in genes related to morphogenesis and reproduction. Overall, our findings demonstrate how ecologically and phenotypically divergent coral species can evolve despite morphological stasis, and provide new leads into the potential mechanisms facilitating such divergence in sympatry. More broadly, they indicate that our current taxonomic framework for reef-building corals may be scratching the surface of the ecologically relevant diversity on coral reefs, consequently limiting our ability to protect or restore this diversity effectively.