Historically documented founder events provide opportunities to assess the effects of population size reductions on genetic variation, but the actual magnitude of genetic change can be measured only when direct comparisons can be made to the source or ancestral population. We assayed variation at nine microsatellite loci in the translocated population of the Laysan finch (Telespiza cantans) at Pearl and Hermes reef (PHR), and compared the level of variation to that in the source population on Laysan Island. Heterogeneity in allele frequencies was highly significant at eight of the nine loci, primarily as a result of fluctuations in allele frequencies in the three PHR populations. Intra- and interpopulational measures of genetic diversity generally matched predictions based on the well-documented history of three islet populations at PHR: significantly lower numbers of alleles and polymorphic loci, as well as higher pairwise FST values and genetic distance, were observed for the two populations that underwent severe size reductions. Changes in heterozygosity at single loci were unpredictable, as both significant increases and decreases were observed in founder populations. A significant excess of heterozygotes was found in two populations and was highly significant over all four finch populations (P < 0.003). Estimates of effective population size from temporal changes in heterozygosity and allele frequencies were very small (Ne≤ 30) as a result of the founding events and the constraints of islet area on population numbers. We concluded that the PHR population is not adequate as a secondary genetic reserve for T. cantans, and an alternative refuge needs to be established.