The Amazon is probably the most diverse realm on Earth, and is considered to be the primary source of diversity and a center of dispersal for Neotropical terrestrial organisms. Yet, the assumption that the Amazon basin is a primordial place of fish species origination and dispersal into other drainages still need to be tested. We addressed this issue by inferring a time-stratified biogeographic history and reconstructing the ancestral habitat preference of Hypostomus, a continentally widespread and species-rich Neotropical genus. We found that Hypostomus emerged in the Western Amazon (~14.7 Ma), when the Western Amazon River was flowing northwards and disconnected from the Eastern Amazon. We show that dispersal events in the first half of Hypostomus evolution occurred from the Western Amazon into adjacent basins, initiating its Neotropical radiation. The ancestral preferred habitat consisted in small rivers with running waters, a predominant habitat in river headwaters. Because of strong niche conservatism in the early evolution of Hypostomus, we suggest that most of the out-of-Western-Amazon dispersal occurred via headwater captures. The radiation of Hypostomus was further promoted by major reconfigurations of river basins, which opened dispersal opportunities into new drainages. Diversification in habitat preference coincided with colonization of basins already occupied by congenerics, indicative of niche shifts triggered by inter-specific competition and species coexistence. By analyzing the evolutionary history of Hypostomus, we show that Western Amazon was the main center of fish dispersal in the Neotropical Region from Middle Miocene to the present, supporting the cradle hypothesis of fish origination and dispersal.