Speciation is a continuous process driven by genetic, geographic, and ecological barriers to gene flow. It is widely investigated in multicellular eukaryotes, yet we are only beginning to comprehend the relative importance of mechanisms driving the emergence of barriers to gene flow in microbial populations. Here, we explored the diversification of the nearly ubiquitous soil cyanobacterium Microcoleus. Our dataset consisted of 291 genomes, of which 202 strains and eight herbarium specimens were sequenced for this study. We found that Microcoleus represents a global speciation continuum of at least 12 lineages, which radiated during Eocene/Oligocene aridification and exhibit varying degrees of divergence and gene flow. The lineage divergence has been driven by selection, geographical distance, and the environment. Evidence of genetic divergence and selection was widespread across the genome, but we identified regions of exceptional differentiation containing candidate genes associated with stress response and biosynthesis of secondary metabolites.