Most empirical studies support a decline in speciation rates through time, although evidence for constant speciation rates also exists. Declining rates have been explained by invoking pre-existing niches, whereas constant rates have been attributed to non-adaptive processes such as sexual selection and mutation. Trends in speciation rate and the processes underlying it remain unclear, representing a critical information gap in understanding patterns of global diversity. Here we show that the temporal trend in the speciation rate can also be explained by frequency-dependent selection. We construct a frequency-dependent and DNA sequence-based model of speciation. We compare our model to empirical diversity patterns observed for cichlid fish and Darwins finches, two classic systems for which speciation rates and richness data exist. Negative frequency-dependent selection predicts well both the declining speciation rate found in cichlid fish and explains their species richness. For groups like the Darwins finches, in which speciation rates are constant and diversity is lower, speciation rate is better explained by a model without frequency-dependent selection. Our analysis shows that differences in diversity may be driven by incipient species abundance with frequency-dependent selection. Our results demonstrate that genetic-distance-based speciation and frequency-dependent selection are sufficient to explain the high diversity observed in natural systems and, importantly, predict decay through time in speciation rate in the absence of pre-existing niches.