A dominant plant of the California grasslands, purple needlegrass [Nassella pulchra (Hitchc.) Barkworth] is an important revegetation species in its native range. The amplified fragment length polymorphism (AFLP) method was used to elucidate mode of reproduction and nucleotide variation among 11 natural populations and three selected natural germplasm releases of N. pulchra. A total of 12 co-dominant AFLPs, informative within eight populations, failed to reveal any heterozygous individuals, indicating very high selfing rates (S̄H = 1). Estimates of nucleotide diversity within populations ranged from 0 to 0.00069 (0.00035 average), whereas the total nucleotide divergence among populations ranged from 0.00107 to 0.00382 (0.00247 average). Measures of population differentiation (GS) in terms of Shannon–Weaver diversity values and estimated nucleotide substitutions were 0.90 and 0.86, respectively. Although some of the sample populations contained a mixture of true breeding genotypes, most populations could be distinguished unambiguously. Moreover, geographical distance between the natural source populations was significantly correlated with genetic distance (r = 0.60) among the corresponding sample populations. Results indicate that inbreeding, combined with founder effects and/or selection, has contributed to the differentiation of N. pulchra populations. Foundation seed populations of the selected natural germplasm releases were genetically well defined and most similar to natural seed collected near the corresponding source populations. Thus, these commercial germplasm sources will be made practically available and useful for conservation plantings within the intended areas of utilization.