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Cataloging the very large number of undescribed species of insects could be greatly accelerated by automated DNA based approaches, but procedures for large-scale species discovery from sequence data are currently lacking. Here, we use mitochondrial DNA variation to delimit species in a poorly known beetle radiation in the genus Rivacindela from arid Australia. Among 468 individuals sampled from 65 sites and multiple morphologically distinguishable types, sequence variation in three mtDNA genes (cytochrome oxidase subunit 1, cytochrome b, 16S ribosomal RNA) was strongly partitioned between 46 or 47 putative species identified with quantitative methods of species recognition based on fixed unique ("diagnostic") characters. The boundaries between groups were also recognizable from a striking increase in branching rate in clock-constrained calibrated trees. Models of stochastic lineage growth (Yule models) were combined with coalescence theory to develop a new likelihood method that determines the point of transition from species-level (speciation and extinction) to population-level (coalescence) evolutionary processes. Fitting the location of the switches from speciation to coalescent nodes on the ultrametric tree of Rivacindela produced a transition in branching rate occurring at 0.43 Mya, leading to an estimate of 48 putative species (confidence interval for the threshold ranging from 47 to 51 clusters within 2 logL units). Entities delimited in this way exhibited biological properties of traditionally defined species, showing coherence of geographic ranges, broad congruence with morphologically recognized species, and levels of sequence divergence typical for closely related species of insects. The finding of discontinuous evolutionary groupings that are readily apparent in patterns of sequence variation permits largely automated species delineation from DNA surveys of local communities as a scaffold for taxonomy in this poorly known insect group.