Palaeoclimatic fluctuations, orogenic events and hybridization are known to interact to drive the dispersal, adaptation, and diversification of plants. In this paper, we focus on the cycad genus, Dioon (Zamiaceae), which is mainly distributed across Mexico, and reconstruct the phylogeny and evolutionary history of 16 species using 2586 genes. Phylotranscriptomic analyses resolve four major clades in Dioon. The southern clade was identified as having potentially undergone an ancient hybridization event followed by rapid radiation, accounting for a substantial gene tree discordance. Molecular dating tracked Dioon's origin to East Mexico during the Oligocene (32.88 Ma), with the epoch of diversification coinciding with late Miocene global cooling and aridification. We found that the highest diversification rates were associated with more arid regions, and aridity index was the primary factor in explaining Dioon's richness pattern. However, the evolution rate of the aridity index was decoupled from diversification rates, and accelerated diversification did not generate high species richness in arid regions. Alternatively, we show that prolonged orogenic activities since the Oligocene enhanced climatic heterogeneity across Mexico, and likely drove regional richness disparities of Dioon. In addition, the Sierra Madre tectonic events may have promoted Dioon to adapt and diversify in higher and drier habitats, where functional traits like reduced plant height, thicker leaflets and epidermis are favored to cope with aridity. Our study clarifies how Miocene-Pliocene aridification and Neogene orogeny jointly shaped Dioon's diversification and biogeography, highlighting the interplay of past climatic change and tectonic complexity in generating neoendemic biodiversity.