We investigated the potential for gene flow and genetic assimilation via hybridization between common and rare species of the terrestrial orchid genus Liparis, focusing specifically on sympatric and allopatric populations of the common Liparis kumokiri and the rare Liparis makinoana. We utilized analyses of genetic diversity, morphology, and the spatial distributions of individuals and genotypes to quantify the dynamics of interspecific gene flow at within- and among-population scales. High levels of allozyme genetic diversity (HE) were found in populations of the rare L. makinoana (0.317), whereas the common L. kumokiri (N = 1744 from 14 populations) revealed a complete lack of variation. This contrast may reflect different breeding systems and associated rates of genetic drift (L. makinoana is self-incompatible, whereas L. kumokiri is self-compatible). At the two known sympatric sites, individuals were found that recombined parental phenotypes, possessing floral characteristics of L. kumokiri and vegetative characteristics of L. makinoana. These putative hybrids were the only individuals found segregating alleles diagnostic of both parental species. Analysis of these individuals indicated that hybrid genotypes were skewed towards L. kumokiri and later generation recombinants of L. kumokiri at both sympatric sites. Furthermore, Ripley's bivariate L(r) statistics revealed that at one site these hybrids are strongly spatially clustered with L. kumokiri. Nonetheless, the relatively low frequency of hybrids, absence of ongoing hybridization (no F1s or first generation backcrossess), and strong genetic differentiation between morphologically ‘pure’ parental populations at sympatric sites (FST = 0.708–0.816) indicates that hybridization was not an important bridge for gene flow. The results from these two species suggest that natural hybridization has not played an important role in the diversification of Liparis, but instead support the view that genetic drift and limited gene flow are primarily responsible for speciation in Liparis. Based on genetic data and current status of the species, implications of the research for conservation are considered to provide guidelines for appropriate conservation and management strategies.