Remote oceanic islands have long been recognized as natural models for the study of evolutionary processes involved in diversification. Their remoteness provides opportunities for isolation and divergence of populations, which make islands remarkable settings for the study of diversification. Groups of islands may share a relatively similar geological history and comparable climate, but their inhabitants experience subtly different environments and have distinct evolutionary histories, offering the potential for comparative studies. A range of organisms have colonized the Galápagos Islands, and various lineages have radiated throughout the archipelago to form unique assemblages. This review pays particular attention to molecular phylogenetic studies of Galápagos terrestrial fauna. We find that most of the Galápagos terrestrial fauna have diversified in parallel to the geological formation of the islands. Lineages have occasionally diversified within islands, and the clearest cases occur in taxa with very low vagility and on large islands with diverse habitats. Ecology and habitat specialization appear to be critical in speciation both within and between islands. Although the number of phylogenetic studies is continuously increasing, studies of natural history, ecology, evolution and behaviour are essential to completely reveal how diversification proceeded on these islands.