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Abstract The symbiosis between clownfishes (or anemonefishes) and their host sea anemones ranks among the most recognizable animal interactions on the planet. Found on coral reef habitats across the Indian and Pacific Oceans, 28 recognized species of clownfishes adaptively radiated from a common ancestor to live obligately with only 10 nominal species of host sea anemones. Are the host sea anemones truly less diverse than clownfishes? Did the symbiosis with clownfishes trigger a reciprocal adaptive radiation in sea anemones, or minimally, a co-evolutionary response to the mutualism? To address these questions, we combined fine- and broad-scale biogeographic sampling with multiple independent genomic datasets for the bubble-tip sea anemone,Entacmaea quadricolor—the most common clownfish host anemone throughout the Indo-West Pacific. Fine-scale sampling and restriction site associated DNA sequencing (RADseq) throughout the Japanese Archipelago revealed three highly divergent cryptic species: two of which co-occur throughout the Ryukyu Islands and can be differentiated by the clownfish species they host. Remarkably, broader biogeographic sampling and bait-capture sequencing reveals that this pattern is not simply the result of local ecological processes unique to Japan, but part of a deeper evolutionary signal where some species ofE. quadricolorserve as host to the generalist clownfish speciesAmphiprion clarkiiand others serve as host to the specialist clownfishA. frenatus. In total, we delimit at least five cryptic species inE. quadricolorthat have diversified within the last five million years. The rapid diversification ofE. quadricolorcombined with functional ecological and phenotypic differentiation supports the hypothesis that this may represent an adaptive radiation in response to mutualism with clownfishes. Our data indicate that clownfishes are not merely settling in locally available hosts but recruiting to specialized host lineages with which they have co-evolved. These findings have important implications for understanding how the clownfish-sea anemone symbiosis has evolved and will shape future research agendas on this iconic model system.