Habitat fragmentation may severely affect survival of social insect populations as the number of nests per population, not the number of individuals, represents population size, hence they may be particularly prone to loss of genetic diversity. Erosion of genetic diversity may be particularly significant among social Hymenoptera such as bumblebees (Bombus spp.), as this group may be susceptible to diploid male production, a suggested direct cost of inbreeding. Here, for the first time, we assess genetic diversity and population structuring of a threatened bumblebee species (Bombus sylvarum) which exists in highly fragmented habitat (rather than oceanic) islands. Effective population sizes, estimated from identified sisterhoods, were very low (range 21–72) suggesting that isolated populations will be vulnerable to loss of genetic variation through drift. Evidence of significant genetic structuring between populations (θ = 0.084) was found, but evidence of a bottleneck was detected in only one population. Comparison across highly fragmented UK populations and a continental population (where this species is more widespread) revealed significant differences in allelic richness attributable to a high degree of genetic diversity in the continental population. While not directly related to population size, this is perhaps explained by the high degree of isolation between UK populations relative to continental populations. We suggest that populations now existing on isolated habitat islands were probably linked by stepping-stone populations prior to recent habitat loss.