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Costus flammulus is a new herbaceous species endemic to montane cloud forests of the volcanic cordilleras in northern Costa Rica. Costus flammulus has been mistaken for C. wilsonii, but phylogenetic evidence demonstrates that it is closely related to the widespread lowland species C. pulverulentus. Here, we used an integrated framework of species concepts to evaluate whether C. flammulus and C. pulverulentus are distinct species. First, we re-evaluate prior phylogenetic analyses to assess whether C. flammulus bifurcated from or budded off from within C. pulverulentus and whether C. flammulus is monophyletic. We then compare phenotypic traits to determine which diagnostic vegetative and inflorescence traits can be used to identify species in herbarium specimens and examine whether floral traits may confer floral isolation. We compare pollinator assemblages to examine whether pollinator specificity may contribute to reproductive isolation. Finally, we model species distributions and climatic niche overlap to assess ecogeographic isolation. We found that C. flammulus is a monophyletic species phenotypically, ecologically, and geographically distinct from C. pulverulentus and may have speciated as a peripheral isolate at the high elevation range edge of C. pulverulentus. Several lines of evidence, such as C. pulverulentus paraphyly, range size asymmetry, and C. flammulus’ nested distribution and vegetative traits, suggest that C. flammulus budded off from a C. pulverulentus‐like progenitor species, evolving to tolerate a colder and more seasonal montane environment.