SignificancePenguins have long been of interest to scientists and the general public, but their evolutionary history remains unresolved. Using genomes, we investigated the drivers of penguin diversification. We found that crown-group penguins diverged in the early Miocene in Australia/New Zealand and identifiedAptenodytes(emperor and king penguins) as the sister group to all other extant penguins. Penguins first occupied temperate environments and then radiated to cold Antarctic waters. The Antarctic Circumpolar Current’s (ACC) intensification 11.6 Mya promoted penguin diversification and geographic expansion. We detected interspecies introgression among penguins, in some cases following the direction of the ACC, and identified genes acting on thermoregulation, oxygen metabolism, and diving capacity that underwent adaptive evolution as they progressively occupied more challenging thermal niches.