MacArthur and Wilson's equilibrium theory is one of the most influential theories in ecology. Although evolution on islands is to be important to island biodiversity, speciation has not been well integrated into island biogeography models. By incorporating speciation and factors influencing it into the MacArthur-Wilson model, we propose a generalized model unifying ecological and evolutionary processes and island features. Intra-island speciation may play an important role in both island species richness and endemism, and the contribution of speciation to local species diversity may eventually be greater than that of immigration under certain conditions. Those conditions are related to the per species speciation rate, per species extinction rate, and island features, and they are independent of immigration rate. The model predicts that large islands will have a high, though not the highest, proportional endemism when other parameters are fixed. Based on the generalized model, changes in species richness and endemism on an oceanic island over time were predicted to be similar to empirical observations. Our model provides an ideal starting point for re-evaluating the role of speciation and re-analyzing available data on island species diversity, especially those biased by the MacArthur-Wilson model.