Lake Tanganyika has undergone substantial climate-driven lake level fluctuations that have repeatedly changed the distribution and extent of habitat for endemic fishes. Here we consider whether patterns of population genetic structure and phenotypic divergence within the cichlid fish Telmatochromis temporalis have been affected by changing lake levels. The species has a large-bodied rock-living ecomorph and a small-bodied shell-living ecomorph, and both are found in close proximity in littoral habitats. Using mtDNA sequences we found that geographically distant (>50 km) populations within the southern lake region diverged approximately 130,000-230,000 years ago, suggesting that the regional genetic structure persisted through a low stand of over 400 m similar to 106,000 years ago that ended with a rise to present levels similar to 100,000 years ago. We also found signatures of large population expansions since this rise across the study region, suggesting that the populations positively responded to new habitat as lake levels rose to present levels. Finally, we found that geographically adjacent (< 10 km) ecomorphs exhibit both significant genetic differentiation and signatures of gene flow after the lake level rise. The results suggest that local ecomorph divergence progressed with gene flow after the last major rise in lake level similar to 100,000, potentially facilitated by new ecological opportunities.