With large tracts of once continuous forest now modified by human use to leave reduced and highly fragmented stands of trees, the determination of the genetic consequences of forest fragmentation is a priority for ascertaining the conservation value of resultant stands, and in formulating sustainable management strategies. The levels and distribution of genetic diversity over 10 microsatellite loci were investigated within a fragmented population of the neotropical tree Swietenia humilis Zucc. High levels of genetic variation, typical of a highly outcrossing species, were found in all fragments at all loci (mean HE = 0.548). The majority of the variation was within rather than between fragments (RST = 0.032), giving high indirect estimates of gene flow (Nm = 8.9), probably reflecting the genetic structure of the trees present under more continuous forest. A high proportion of loci also showed significant departures from Hardy–Weinberg equilibrium with associated significant levels of FIS. The initial effects of fragmentation were, however, seen in the fragments through the loss of low-frequency alleles present in the continuous ‘control’ stand. The percentage of this allelic loss increased with a decrease in fragment size.