Mountains are among the most biodiverse regions on the planet, and how these landforms shape diversification through the interaction of biological traits and geo-climatic dynamics is integral to understanding global biodiversity. In this study, we investigate the dual roles of climate change and mountain uplift on the evolution of a hyper-diverse radiation, Liolaemus lizards, with a spatially explicit model of diversification using a reconstruction of uplift and paleotemperature in central and southern South America. The diversification model captures a hotspot for Liolaemus around 40°S in lineages with low-dispersal ability and narrow niche breadths. Under the model, speciation rates are highest in low latitudes (<35°S) and mid elevations (~1,000 m), while extinction rates are highest at higher latitudes (>35°S) and higher elevations (>2,000 m). Temperature change through the Cenozoic explained variation in speciation and extinction rates through time and across different elevational bands. Our results point to the conditions of mid elevations being optimal for diversification (i.e., Goldilocks Zone), driven by the combination of (1) a complex topography that facilitates speciation during periods of climatic change, and (2) a relatively moderate climate that enables the persistence of ectothermic lineages and buffers species from extinction.