The Australian Tawny Dragon lizard (Ctenophorus decresii), as currently recognized, comprises two genetically divergent lineages, northern and southern, that differ notably in male coloration. A narrow contact zone exists between the lineages with asymmetric and limited hybridization, indicating incompatibility and highlighting the need for further taxonomic assessment. Here, we evaluate morphological variation in C. decresii and elevate the lineages to separate species. The southern lineage retains the name C. decresii (Duméril and Bibron, 1837), and we formally reinstate C. modestus for the northern lineage, which was previously a synonym of C. decresii (Amphibolurus modestus,Ahl, 1926). We redescribe C. modestus and C. decresii and highlight important considerations for reevaluation of their conservation statuses. Recognition of C. modestus represents another species that may have differentiated in relatively mesic mountainous refugia during Pleistocene glacial-interglacial cycles, and underscores the importance of divergence in male coloration as a driver of speciation in the rock dragon species group.