The rare rainforest tree species, Syzygium paniculatum, is the only known Australian species of the genus to produce seeds that regularly have multiple embryos. Evidence from other species suggests that this is a case of adventitious polyembryony, with the embryos arising from maternal nucellar tissue. In the present study we use microsatellite data to determine whether sexual reproduction does occur and, if it does, to investigate the relative fitness of asexual versus sexual seedlings. Genotyping suggested that the species is a polyploid and our results found very little genetic diversity within and among populations (with a total of nine genotypic combinations across the entire species). The only significant variation was between the three northernmost populations and the other eight populations sampled. Analysis of individual embryos showed that sexually derived embryos did occur in some seeds but that these were not necessarily the fittest. In general, the seedling from the largest embryo is the first to emerge and maintains a competitive advantage over the other seedlings from the same seed. We discuss the ramifications of the low levels of genetic diversity and consider whether there is a direct relationship between polyembryony and the inferred polyploidy of the species. We consider the possible advantages of reproductive bet-hedging but also highlight the susceptibility of a species with low genetic diversity to extreme stochastic events. Syzygium paniculatum occurs in areas heavily impacted by human activity and these findings should contribute to improved management of this threatened species.