Morphology is expected to represent species' ecological niches, based on microhabitat and ecological selection pressures dictating morphological adaptations for efficient performance. However, the presence of competitor species is predicted to cause niches to contract. Therefore, an increase in species richness is expected to lead to narrower niches, and reduced overlap and distances between niches of different species. We tested these predictions on the skink fauna of New Guinea, the world's largest tropical island. We show that, while some morphospace metrics change predictably with species richness, elevation is a stronger predictor of morphospace occupancy. As elevation increases niches become narrower and closer to each other, and overall morphospace occupancy decreases. Highland skinks are, on average, smaller, thinner, and with shorter limbs than lowland species. We hypothesize that harsh climates in highland habitats impose strong selection on skinks to occupy specific areas of morphospace that facilitate efficient thermoregulation in sub-optimal thermal conditions.