The karst areas in the Dinaric region of the Western Balkan Peninsula are a hotspot of freshwater biodiversity. Many investigators have examined diversification of the subterranean freshwater fauna in these karst systems. However, diversification of surface-water fauna remains largely unexplored. We assessed local and regional diversification of surface-water species in karst systems and asked whether patterns of population differentiation could be explained by dispersal—diversification processes or allopatric diversification following karstrelated microscale vicariance. We analyzed mitochondrial cytochrome c oxidase subunit I (mtCOI) sequence data of 4 caddisfly species (genus Drusus) in a phylogeographic framework to assess local and regional population genetic structure and Pliocene/Pleistocene history. We used BEAST software to assess the timing of intraspecific diversification of the target species. We compared climate envelopes of the study species and projected climatically suitable areas during the last glacial maximum (LGM) to assess differences in the species climatic niches and infer potential LGM refugia. The haplotype distribution of the 4 species (324 individuals from 32 populations) was characterized by strong genetic differentiation with few haplotypes shared among populations (16%) and deep divergence among populations of the 3 endemic species, even at local scales. Divergence among local populations of endemics often exceeded divergence among regional and continental clades of the widespread D. discolor. Major divergences among regional populations dated to 2.0 to 0.5 Mya. Species distribution model projections and genetic structure suggest that the endemic species persisted in situ and diversified locally throughout multiple Pleistocene climate cycles. The pattern for D. discolor was different and consistent with multiple invasions into the region. Patterns of population genetic structure and diversification were similar for the 3 regional endemic Drusus species and consistent with microscale vicariance after the onset of intensified karstification in the Dinaric region. Karstification may induce microscale vicariance of running surface-water habitats and probably promotes allopatric fragmentation of stream insects at small spatialscales.