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Sahul unites the world's largest and highest tropical island and the oldest and most arid continent on the backdrop of dynamic environmental conditions. Massive geological uplift in New Guinea is predicted to have acted as a species pump from the late Miocene onward, but the impact of this process on biogeography and diversification remains untested across Sahul as a whole. To address this, we reconstruct the assembly of a recent and diverse radiation of rodents (Murinae: Hydromyini) spanning New Guinea, Australia, and oceanic islands. Using phylogenomic data from 270 specimens, including many recently extinct and highly elusive species, we find that the orogeny and expansion of New Guinea opened ecological opportunity and triggered diversification across a continent. After a single over-water colonization from Asia ca. 8.5 Ma, ancestral Hydromyini were restricted to the tropical rainforest of proto-New Guinea for 3.5 million years. Following a shift in diversification coincident with the orogeny of New Guinea ca. 5 Ma and subsequent colonization of Australia, transitions between geographic regions (n = 24) and biomes (n = 34) become frequent. Recurrent over-water colonization between mainland and islands demonstrate how islands can play a substantial role in the assembly of continental fauna. Our results are consistent with a model of increased ecological opportunity across Sahul following major geological uplift in New Guinea ca. 5 Ma, with sustained diversification facilitated by over-water colonization from the Pleistocene to present. We show how geological processes, biome transitions, and over-water colonization collectively drove the diversification of an expansive continental radiation. [Display omitted] • Species-level phylogeny of Sahul rodents, including extinct and elusive species • Geological uplift in New Guinea from 5 Ma triggered diversification across Sahul • Complex biogeographic history, including 23 geographic and 34 biome transitions • Over-water colonization and islands are important sources for continental radiations Roycroft et al. reconstruct the diversification of rodents (Murinae: Hydromyini) across New Guinea, Australia, and Melanesian islands since the Miocene. With species-level phylogenomic data, they show how geological processes, biome transitions, and over-water colonization drove diversification in an expansive continental radiation. [ABSTRACT FROM AUTHOR]