The ecology, abundance and diversity of galatheoid squat lobsters make them and ideal group to study deep-sea diversification processes. Here, we reconstructed the evolutionary and biogeographic history of Leiogalathea, a genus of circum-tropical deep-sea squat lobsters, in order to compare patterns and processes that have affected shallow-water and deep-sea squat lobster species. We first built a multilocus phylogeny and a calibrated species tree with a relaxed clock using StarBEAST2 to reconstruct evolutionary relationships and divergence times among Leiogalathea species. We used BioGeoBEARS and a DEC model, implemented in RevBayes, to reconstruct ancestral distribution ranges and the biogeographic history of the genus. Our results showed that Leiogalathea is monophyletic and comprises four main lineages; morphological homogeneity is common within and between clades, except in one; the reconstructed ancestral range of the genus is in the Atlantic and Indian oceans (Tethys). They also revealed the divergence of the Atlantic species around 25 million years ago (Ma), intense cladogenesis 15–25 Ma and low levels of speciation over the last 5 million years (Myr). The four Leiogalathea lineages showed similar patterns of speciation: allopatric speciation followed by range expansion and subsequent stasis. Leiogalathea started diversifying during the Oligocene, likely in the Tethyan. The Atlantic lineage then split from its Indo-Pacific sister group due to vicariance driven by closure of the Tethys Seaway. The Atlantic lineage is less speciose compared with the Indo-Pacific lineages, with the Tropical Southwestern Pacific being the current centre of diversity. Leiogalathea diversification coincided with cladogenetic peaks in shallow-water genera, indicating that historical biogeographic events similarly shaped the diversification and distribution of both deep-sea and shallow-water squat lobsters.