The formation of independent evolutionary lineages involves neutral and selective factors, and understanding their relative roles in population divergence is a fundamental goal of speciation research. Correlations between allele frequencies and environmental variability can reveal the role of selection, yet the relative contribution of drift can be difficult to establish. Recently diversified taxa like the Oregon junco (Aves, Passerellidae, Junco hyemalis oreganus) of western North America provide ideal scenarios to apply genetic-environment association analyses (GEA) while controlling for population structure. Analysis of genome-wide SNP loci revealed marked genetic structure consisting of differentiated populations in isolated, dry southern mountain ranges, and less divergent, recently expanded populations in humid northern latitudes. We used correlations between genomic and environmental variance to test for three specific modes of evolutionary divergence: (a) drift in geographic isolation, (b) differentiation along continuous selective gradients and (c) isolation by adaptation. We found evidence of strong drift in southern mountains, but also signals of local adaptation driven by temperature, precipitation, elevation and vegetation, especially when controlling for population history. We identified numerous variants under selection scattered across the genome, suggesting that local adaptation can promote rapid differentiation when acting over multiple independent loci.