We analysed the diversification of squamate reptiles (7488 species) based on a new molecular phylogeny, and compared the results to similar estimates for passerine birds (5712 species). The number of species in each of 36 squamate lineages showed no evidence of phylogenetic conservatism. Compared with a random speciation-extinction process with parameters estimated from the size distribution of clades, the alethinophidian snakes (2600 species) were larger than expected and 13 clades, each having fewer than 20 species, were smaller than expected, indicating rate heterogeneity. From a lineage-through-time plot, we estimated that a provisional rate of lineage extinction (0.66 per Myr) was 94% of the rate of lineage splitting (0.70 per Myr). Diversification in squamate lineages was independent of their stem age, but strongly related to the area of the region within which they occur. Tropical vs. temperate latitude exerted a marginally significant influence on species richness. In comparison with passerine birds, squamates share several clade features, including: (1) independence of species richness and age; (2) lack of phylogenetic signal with respect to clade size; (3) general absence of exceptionally large clades; (4) over-representation of small clades; (5) influence of region size on clade size; and (6) similar rates of speciation and extinction. The evidence for both groups suggests that clade size has achieved long-term equilibrium, suggesting negative feedback of species richness on the rate of diversification.