An estimated one billion people are at risk of acquiring the disease leishmaniasis annually. This disease, among others, is transmitted to humans via sandfly vectors of the family Psychodidae. In the Neotropics, Lutzomyia longipalpis is one of the most common vectors of leishmaniasis, but little is known about its genetics and population structure, hampering control efforts. We generated sex-specific genome assemblies of Lu. longipalpis from Colombia, and examined population genomics of this species. We found that sex accounts for ~11% of genome-wide variation, primarily driven by differentiation between the sexes in an XY sex chromosome. Analyses of transposable elements indicate that the size difference in the sex chromosome is driven by more transposable elements in the male chromosome. Further, we examined population genomics and structure across the South American continent. We identified significant genetic divergence between Colombian and Brazilian sandflies and population structure within Lu. longipalpis sensu lato samples collected from the same sites in Brazil. These results strongly suggest the presence of multiple, sympatric species within a cryptic species complex, concordant with other published phenotypic evidence.