In ants the presence of multiple reproductive queens (polygyny) decreases the relatedness among workers and the brood they rear, and subsequently dilutes their inclusive fitness benefits from helping. However, adoption of colony daughters, low male dispersal in conjunction with intranidal (within nest) mating and colony reproduction by budding may preserve local genetic differences, and slow down the erosion of relatedness. Reduced dispersal and intranidal mating may, however, also lead to detrimental effects owing to competition and inbreeding. We studied mating and dispersal patterns, and colony kinship in three populations of the polygynous ant Plagiolepis pygmaea using microsatellite markers. We found that the populations were genetically differentiated, but also a considerable degree of genetic structuring within populations. The genetic viscosity within populations can be attributed to few genetically homogeneous colony networks, which presumably have arisen through colony reproduction by budding. Hence, selection may act at different levels, the individuals, the colonies and colony networks. All populations were also significantly inbred (F = 0.265) suggesting high frequencies of intranidal mating and low male dispersal. Consequently the mean regression relatedness among workers was significantly higher (r = 0.529–0.546) than would be expected under the typically reported number (5–35) of queens in nests of the species. Furthermore, new queens were mainly recruited from their natal or a neighbouring related colony. Finally, the effective number of queens coincided with that found upon excavation, suggesting low reproductive skew.