Understanding the scale of marine population connectivity is critical for the conservation and sustainable management of marine resources. For many marine species adults are benthic and relatively immobile, so patterns of larval dispersal and recruitment provide the key to understanding marine population connectivity. Contrary to previous expectations, recent studies have often detected unexpectedly low dispersal and fine-scale population structure in the sea, leading to a paradigm shift in how marine systems are viewed. Nonetheless, the link between fine-scale marine population structure and the underlying physical and biological processes has not been made. Here we show that patterns of genetic structure and population connectivity in the broadcast-spawning and long-distance dispersing sea urchin Centrostephanus rodgersii are influenced by physical oceanographic and geographic variables. Despite weak genetic differentiation and no isolation-by-distance over thousands of kilometers among samples from eastern Australia and northern New Zealand, fine-scale genetic structure was associated with sea surface temperature (SST) variability and geography along the southeastern Australian coast. The zone of high SST variability is characterized by periodic shedding of eddies from the East Australian Current, and we suggest that ocean current circulation may, through its influence on larval transport and recruitment, interact with the genetic consequences of large variance in individual reproductive success to generate patterns of fine-scale patchy genetic structure. If proven consistent across species, our findings suggest that the optimal scale for fisheries management and reserve design should vary among localities in relation to regional oceanographic variability and coastal geography.