Two genetic consequences are often considered evidence of a founder effect: substantial loss in genetic diversity and rapid divergence between source and founder populations. Single-step founder events have been studied for these effects, but with mixed results, causing continued controversy over the role of founder events in divergence. Experiments of serial bottlenecks have shown losses of diversity, increased divergence, and rapid behavioural changes possibly leading to reproductive isolation between source and final populations. The few studies conducted on natural, sequentially founded systems show some evidence of these effects. We examined a natural vertebrate system of sequential colonization among northwestern song sparrows (Melospiza melodia). This system has an effectively linear distribution, it was probably colonized within the last 10 000 years, there are morphological and behavioural differences among populations, and the westernmost populations occur in atypical habitats for the species. Eight microsatellite loci from eight populations in Alaska and British Columbia (n = 205) showed stepwise loss of genetic diversity, genetic evidence for strong population bottlenecks, and increased population divergence. The endpoint population on Attu Island has extremely low diversity (HE = 0.18). Our study shows that sequential bottlenecks or founder events can have powerful genetic effects in reducing diversity, possibly leading to rapid evolutionary divergence.