We studied foraging segregation between two different sized colonies of little penguins Eudyptula minor with overlapping foraging areas in pre-laying and incubation. We used stomach contents and stable isotope measurements of nitrogen (δ15N) and carbon (δ13C) in blood to examine differences in trophic position, prey-size and nutritional values between the two colonies. Diet of little penguins at St Kilda (small colony) relied heavily on anchovy while at Phillip Island (large colony), the diet was more diverse and anchovies were larger than those consumed by St Kilda penguins. Higher δ15N values at St Kilda, differences in δ13C values and the prey composition provided further evidence of diet segregation between colonies. Penguins from each colony took anchovies from different cohorts and probably different stocks, although these sites are only 70 km apart. Differences in diet were not reflected in protein levels in the blood of penguins, suggesting that variation in prey between colonies was not related to differences in nutritional value of the diet. Anchovy is currently the only available prey to penguins throughout the year and its absence could have a negative impact on penguin food supply, particularly at St Kilda where the diet is dominated by this species. While it is difficult to establish whether diet segregation is caused by inter- or intra-colony competition or spatial differences in foraging areas, we have shown that colonies with broadly overlapping foraging ranges could have significant differences in trophic position, diet composition and prey size while maintaining a diet of similar nutritional value.