The trees and shrubs in Olearia sect. Divaricaster, sect. nov., are found in North, South, and Stewart Islands of New Zealand. They are distinguished by their small, opposite leaves borne on brachyblasts (short shoots), long shoots which abort apically, solitary or fascicled capitula, flowers with purple style arms, and a very distinctive insect fauna. The ten species and three subspecies, including the new O. fimbriata, O. gardneri and O. virgata subsp. centralis are revised and a key and distribution maps provided. The section includes four threatened species: O. hectorii, O. polita and the two new species. Species density is mapped in grid cells 1 degrees latitude by 1 degrees longitude. Areas west of the geological Median Tectonic Zone (Nelson, Westland and Fiordland) show relatively low diversity. The highest diversity, six species in one grid cell, is recorded in north-west Otago, around Mt Aspiring and the Humboldt Mountains. This region is also geologically significant as several allochthonous terranes are juxtaposed there. In the central South Island O. laxiflora, O. fimbriata and O. odorata have concentric distributions around what were Tertiary basins and inland seas. Members of the section favour fertile, lowland sites on alluvium and have suffered reduction in population size over the last century due to agricultural development. Several species, such as O. hectorii, the 'swamp gum', occur in sites which are periodically flooded. Olearia solandri is a coastal species, often growing as a mangrove associate, but occasionally found inland. The anomalous inland populations are discussed and their location attributed to geological uplift.