Article first published online: 16 DEC 2003. 1. Molecular approaches have increasingly revealed hidden genetic structure within ecologically important species, leading to the creation of sibling species whose ecological relevance is often unclear. A prime example is Daphnia galeata mendotae, which was split into D. dentifera and D. mendotae based on differences at two allozyme loci. 2. In a set of lake populations in Michigan USA, we test the geographical and temporal consistency of the genetic structure underlying this species split. We also test the morphological relevance of this molecular variation and its ecological significance in lakes. In essence, we ask: does recognition of these new species provide valuable information for plankton ecologists? 3. We found that D. dentifera and D. mendotae represent morphologically and ecologically distinct forms that are distributed among lakes in non-random fashion, which were remarkably stable over 6 years. Key differences between the species concern their body and head shape, vertical habitat use within lakes and distribution among lakes of different size. We hypothesise that these differences represent specialisation to habitats that differ in risk of invertebrate predation. 4. Reproductive barriers alone are insufficient to explain the pattern of genetic structure; in some lakes complete introgression is apparent. However, parent species and hybrids exhibit a stable co-existence in many lakes, which suggests that ecological specialisation reinforces divergence within this taxon.