Paleovegetation modeling simulations of the lowland Amazon basin were made to assess the relative importance of glacial climate and atmospheric CO2 for altering vegetation type and structure, as well as to explore the potential physiological mechanisms underlying these ecosystem-level responses. Modeling results support the view that widespread invasion of grasslands into the Amazon lowlands during the last glaciation was not likely. Glacial cooling was probably responsible for maintaining glacial forest cover via its effects in reducing photorespiration and decreasing evapotranspiration, which collectively improve plant carbon and water relations. Modeling results confirm that leaf area index (LAI), a common proxy for canopy density, is highly sensitive to independent and interactive changes in climate and low concentration of atmospheric CO2, and the results show considerable region-to-region variation during the last glaciation. Heterogeneous variations in glacial vegetation LAI may have promoted allopatric speciation by geographically isolating species (called vicariance) in the forest (sub)canopy. The proposed vicariance hypothesis incorporating spatial variations in canopy density conforms to many of the essential tenets addressed by previous neotropical speciation models, but also helps to overcome some of their inconsistencies.