Morphological divergence under gene flow was investigated in the wall lizard Teira dugesii from the Atlantic island of Madeira island. Lizards (n=334) were sampled using a matched pairs design at four distinct coastal localities. Matched pairs comprised adjacent (<1 km) grey shingle beach and inland sites. Luminances of specific dorsal areas were recorded for each RGB channel from digital photographs taken in the field. Lizards were found to be significantly darker at beach sites than inland sites. Geometric morphometric analyses using 35 landmarks placed on dorsal photographs of the head revealed significant divergence between beach/inland habitats: wider snouts were found at beach sites. Genotyping-by-sequencing of 93 individuals provided 19311 cross-genomic SNPs. A spatial principal components analysis showed significant genomic divergence across the four sampled localities and within these localities. However, there was no evidence that beach and inland populations formed distinct lineages. Patterns of genomic divergence were compared with those generated from simulations under three models. Primary findings were repeated across all four localities. The model of divergence without gene flow was rejected, while the most strongly supported model incorporating two periods of gene flow: an early period of lower gene flow followed by a period of higher gene flow. Gene flow from inland to beach was greater than that in the opposite direction. This study demonstrates ecologically significant morphological divergence in the face of gene flow and adds to understanding of how divergence and speciation may occur within small islands.