Conspecific aggregations in terrestrial and aquatic organisms can have a significant effect on an individual’s survival, growth and reproductive fitness, particularly if these aggregations are composed of closely related individuals. Such aggregations can form passively, as a consequence of dispersal, or actively, as a consequence of kin recognition. In this study, we investigated the genetic composition of individuals in conspecific aggregations in the simultaneous hermaphroditic marine bryozoan Bugula stolonifera. Conspecific larvae routinely metamorphose on adult colonies; the possibility that larvae select or avoid their maternal colony was investigated utilizing 10 newly developed polymorphic microsatellite loci. Adult colonies were collected from Eel Pond, Woods Hole, Massachusetts and inspected for the presence of attached individuals. Adult colonies and their attached individuals were genotyped and compared to assess genetic relatedness within and among these groups relative to the overall genetic variability of the sampling site. Overall, the population of B. stolonifera at this site was found to be outside Hardy–Weinberg equilibrium because of significant levels of inbreeding. No significant genetic differentiation, however, was found between any groups, documenting that a group containing an adult colony and its attached individuals had as much genetic variability as was found for the entire sampling site. Parentage-exclusion analyses showed that the vast majority of attached individuals (>93%) could not have derived from the colony on which they were attached. Kinship analyses showed that the majority of attached individuals (≈63%) shared less than a half-sibling relationship. These results suggest that a colony’s nearest neighbours are not composed of siblings, and thus, larval settlement preference can maximize outcrossing in this inbreeding population.