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Reproductive character displacement occurs when sympatric and allopatric populations of a species differ in traits crucial to reproduction, and it is commonly thought of as a signal of selection acting to limit hybridization. Most documented cases of reproductive character displacement involve characters that are poorly understood at the genetic level, and rejecting alternative hypotheses for biogeographic shifts in reproductive traits is often very difficult. In sea urchins, the gamete recognition protein bindin evolves under positive selection when species are broadly sympatric, suggesting character displacement may be operating in this system. We sampled sympatric and allopatric populations of two species in the sea urchin genus Echinometra for variation in bindin and for the mitochondrial cytochrome oxidase I to examine patterns of population differentiation and molecular evolution at a reproductive gene. We found a major shift in bindin alleles between central Pacific (allopatric) and western Pacific (sympatric) populations of E. oblonga. Allopatric populations of E. oblonga are polyphyletic with E. sp. C at bindin, whereas sympatric populations of the two species are reciprocally monophyletic. There is a strong signal of positive selection (P(N)/P(S) = 4.5) in the variable region of the first exon of bindin, which is associated with alleles found in sympatric populations of E. oblonga. These results indicate that there is a strong pattern of reproductive character displacement between E. oblonga and E. sp. C and that the divergence is driven by selection. There is much higher population structure in sympatric populations at the bindin locus than at the neutral mitochondrial locus, but this difference is not seen in allopatric populations. These data suggest a pattern of speciation driven by selection for local gamete coevolution as a result of interactions between sympatric species. Although this pattern is highly suggestive of speciation by reinforcement, further research into hybrid fitness and egg-sperm interactions is required to address this potential mechanism for character displacement.