Effective conservation and utilization strategies for natural biological resources require a clear understanding of the natural populations of the target organisms. Tricholoma matsutake is an ectomycorrhizal mushroom that forms symbiotic associations with plants and plays an important ecological role in natural forest ecosystems in many parts of the world. It is also an economically very important gourmet mushroom. Because no artificial cultivation is available, natural populations of this species are under increasing threats, primarily from habitat disturbance and destruction. Despite its economical and ecological importance, little is known about its genetics and population biology. Here, using 14 polymerase chain reaction–restriction fragment length polymorphism markers, we analysed 154 strains from 17 geographical locations in southwestern China, a region where over 25% of the global T. matsutake harvest comes from. Our results revealed abundant genetic variation within individual populations. The analyses of gene and genotype frequencies within populations indicated that most loci did not deviate from Hardy–Weinberg equilibrium in most populations and that alleles among loci were in linkage equilibrium in the majority of the local populations. These results are consistent with the hypothesis that sexual reproduction and recombination play an important role in natural populations of this species. Our analyses indicated low but significant genetic differentiation among the geographical populations, with a significant positive correlation between genetic distance and geographical distance. We discuss the implications of our results to the ecology and resource management of this species.