Molecular approaches have revolutionized our ability to study the ecology and evolution of micro-organisms. Among the most widely used genetic markers for these studies are genes and spacers of the rDNA operon. However, the presence of intragenomic rDNA variation, especially among eukaryotes, can potentially confound estimates of microbial diversity. To test this hypothesis, bacterially cloned PCR products of the internal transcribed spacer (ITS) region from clonal isolates of Symbiodinium, a large genus of dinoflagellates that live in symbiosis with many marine protists and invertebrate metazoa, were sequenced and analysed. We found widely differing levels of intragenomic sequence variation and divergence in representatives of Symbiodinium clades A to E, with only a small number of variants attributed to Taq polymerase/bacterial cloning error or PCR chimeras. Analyses of 5.8S-rDNA and ITS2 secondary structure revealed that some variants possessed base substitutions and/or indels that destabilized the folded form of these molecules; given the vital nature of secondary structure to the function of these molecules, these likely represent pseudogenes. When similar controls were applied to bacterially cloned ITS sequences from a recent survey of Symbiodinium diversity in Hawaiian Porites spp., most variants (~87.5%) possessed unstable secondary structures, had unprecedented mutations, and/or were PCR chimeras. Thus, data obtained from sequencing of bacterially cloned rDNA genes can substantially exaggerate the level of eukaryotic microbial diversity inferred from natural samples if appropriate controls are not applied. These considerations must be taken into account when interpreting sequence data generated by bacterial cloning of multicopy genes such as rDNA.