A common pattern of adaptive diversification in freshwater fishes is the repeated evolution of elongated open water (limnetic) species and high-bodied shore (benthic) species from generalist ancestors. Studies on phenotype-diet correlations have suggested that population-wide individual specialization occurs at an early evolutionary and ecological stage of divergence and niche partitioning. This variable restricted niche use across individuals can provide the raw material for earliest stages of sympatric divergence. We investigated variation in morphology and diet as well as their correlations along the benthic-limnetic axis in an extremely young Midas cichlid species, Amphilophus tolteca, endemic to the Nicaraguan crater lake Asososca Managua. We found that A. tolteca varied continuously in ecologically relevant traits such as body shape and lower pharyngeal jaw morphology. The correlation of these phenotypes with niche suggested that individuals are specialized along the benthic-limnetic axis. No genetic differentiation within the crater lake was detected based on genotypes from 13 microsatellite loci. Overall, we found that individual specialization in this young crater lake species encompasses the limnetic- as well as the benthic macro-habitat. Yet there is no evidence for any diversification within the species, making this a candidate system for studying what might be the early stages preceding sympatric divergence.