The extent of evolutionary divergence of phenotypes between habitats is predominantly the result of the balance of differential natural selection and gene flow. Lava lizards (Microlophus albemarlensis) on the small island of Plaza Sur in the Galápagos archipelago inhabit contrasting habitats: dense vegetation on the western end of the island thins rapidly in a transitional area, before becoming absent on the eastern half. Associated with these habitats are phenotypic differences in traits linked to predator avoidance (increased wariness, sprint speed, and endurance in lizards from the sparsely vegetated habitat). This population provides an opportunity to test the hypothesis that reduced gene flow is necessary for phenotypic differentiation. There was no evidence of any differences among habitats in allele frequencies at six out of seven microsatellite loci examined, nor was there any indication of congruence between patterns of genetic variability and the change in vegetation regime. We infer that gene flow between the habitats on Plaza Sur must be sufficiently high to overcome genetic drift within habitats but that it does not preclude phenotypic differentiation.