Tropical America is the most biodiverse region on Earth. Studies aiming to understand the origin and drivers of such diversity have mainly focused on South American ecosystems, while the Caribbean and Central America remain poorly studied. However, their megadiversity, their intercontinental location and their dynamic geologic history, provide a rich framework to analyse the processes of biotic dispersal, local diversification and extinction. Here, the evolution of Caribbean and Central American floras in time and space was reconstructed, and the relative roles of those processes in shaping extant diversity was assessed. Based on DNA data obtained using Sanger and NGS sequencing, the dated phylogenies of different palm (Arecaceae) clades were reconstructed and used to estimate biogeographic and diversification patterns. The results showed that although dispersal and extinction were in action, local diversification played the most significant role in generating the outstanding diversity of the Caribbean and Central American floras.