Gene flow between populations is restricted in fragmented habitats, which can promote a more rapid genetic diversification as evolutionary forces act on isolated gene pools. Here, we compare two silverside species occurring in a continuous coastal habitat (tidewater silverside, Menidia peninsulae Goode and Bean, 1879) vs a highly fragmented habitat consisting of hypersaline pools (key silverside, Menidia conchorum Hildebrand and Ginsburg, 1927). First, we aim to better resolve the morphological and genetic relationships between the two nominal species using a haplotype analysis at two loci (NADH dehydrogenase 2, internal transcribed space r2) and geometric morphometrics. Despite some haplotype sharing and incomplete lineage sorting, they were both genetically differentiated (φST = 0.2186 and 0.4198, respectively, P < 0.0001) and showed significant discriminating morphometric characteristics. Second, we made a temporal comparison of genetic diversity and effective population size (Ne) in key silversides over time using seven polymorphic microsatellite loci and found that genetic diversity and Ne of key silversides were lower in these pools compared to tidewater silversides in the marine environment and decreased over time. We conclude that key silversides more likely represent an ecotype of the tidewater silverside and thus harbor a distinct adaptive potential. Further, our results support the hypothesis that highly fragmented aquatic habitats promote rapid genetic change and species diversification. Finally, we discuss the management applications of our study pertaining to the current listing of key silversides as a National Marine Fisheries Service Species of Concern.