The Cape region of South Africa is a hotspot of flowering plant biodiversity. However, the reasons why levels of diversity and endemism are so high remain obscure. Here, we reconstructed phylogenetic relationships among species in the genus Protea, which has its center of species richness and endemism in the Cape, but also extends through tropical Africa as far as Eritrea and Angola. Contrary to previous views, the Cape is identified as the ancestral area for the radiation of the extant lineages: most species in subtropical and tropical Africa are derived from a single invasion of that region. Moreover, diversification rates have been similar within and outside the Cape region. Migration out of the Cape has opened up vast areas, but those lineages have not diversified as extensively at fine spatial scales as lineages in the Cape. Therefore, higher net rates of diversification do not explain the high diversity and endemism of Protea in the Cape. Instead, understanding why the Cape is so diverse requires an explanation for how Cape species are able to diverge and persist at such small spatial scales.