Most relatives of the self-fertilizing hermaphroditic nematode model organism Caenorhabditis elegans reproduce via obligate outbreeding between males and females, which also represents the ancestral mode of reproduction within the genus. However, little is known about the scope of genetic diversity and differentiation within such gonochoristic species, especially those found outside of temperate Europe and North America. It is critical to understand the evolutionary processes operating in these species to provide a framework for deciphering the evolution of hermaphroditism and a baseline for the application of outcrossing Caenorhabditis to problems in evolutionary genetics. Here, we investigate for the first time molecular sequence variation for Caenorhabditis sp. 5, a species found commonly in eastern Asia. We identify enormous levels of standing genetic variation that approach the levels observed in the marine broadcast-spawning sea squirt, Ciona savignyi. Although we document significant isolation by distance, we demonstrate that the high polymorphism within C. sp. 5 is not because of strong differentiation among populations or to the presence of cryptic species. These findings illustrate that molecular population genetic approaches to studying obligately outbreeding species of Caenorhabditis will prove powerful in identifying and characterizing functionally and evolutionarily important features of the genome.