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Background: Oceanic archipelagos typically harbour extensive radiations of flowering plants and a high proportion of endemics, many of which are restricted to a single island (Single Island Endemics; SIEs). The Azores represents an anomaly as overall levels of endemism are low; there are few SIEs and few documented cases of intra-archipelago radiations. The distinctiveness of the flora was first recognized by Darwin and has been referred to as the 'Azores Diversity Enigma' (ADE). Diversity patterns in the Macaronesian endemic genus Pericallis (Asteraceae) exemplify the ADE. In this study we used morphometric, Amplified Length Polymorphisms, and bioclimatic data for herbaceous Pericallis lineages endemic to the Azores and the Canaries, to test two key hypotheses proposed to explain the ADE: i) that it is a taxonomic artefact or Linnean shortfall, ie. the under description of taxa in the Azores or the over-splitting of taxa in the Canaries and (ii) that it reflects the greater ecological homogeneity of the Azores, which results in limited opportunity for ecological diversification compared to the Canaries. Results: In both the Azores and the Canaries, morphological patterns were generally consistent with current taxonomic classifications. However, the AFLP data showed no genetic differentiation between the two currently recognized Azorean subspecies that are ecologically differentiated. Instead, genetic diversity in the Azores was structured geographically across the archipelago. In contrast, in the Canaries genetic differentiation was mostly consistent with morphology and current taxonomic treatments. Both Azorean and Canarian lineages exhibited ecological differentiation between currently recognized taxa. Conclusions: Neither a Linnean shortfall nor the perceived ecological homogeneity of the Azores fully explained the ADE-like pattern observed in Pericallis. Whilst variation in genetic data and morphological data in the Canaries were largely congruent, this was not the case in the Azores, where genetic patterns reflected inter-island geographical isolation, and morphology reflected intra-island bioclimatic variation. The combined effects of differences in (i) the extent of geographical isolation, (ii) population sizes and (iii) geographical occupancy of bioclimatic niche space, coupled with the morphological plasticity of Pericallis, may all have contributed to generating the contrasting patterns observed in the archipelagos. [ABSTRACT FROM AUTHOR]