Western Australian sandalwood, Santalum spicatum, is widespread in the semi-arid and arid regions of Western Australia, and there is some morphological variation suggestive of two ecotypes. The level and structuring of genetic diversity within the species was investigated using anonymous nuclear RFLP loci. Santalum spicatum showed moderate levels of genetic diversity compared to other Australian tree species. The northern populations in the arid region showed greater levels of diversity and less population differentiation than the southern populations in the semi-arid region due to differences in the distribution of rare alleles. Equilibrium between drift and gene flow in the northern populations indicated that they have been established for a long period of time with stable conditions conducive to gene flow. In contrast, the southern populations showed a relationship between drift and gene flow indicative of a pattern of fragmentation and isolation where drift has greater effect than gene flow. The different patterns of diversity suggest that the ecotypes in the two regions have been subject to differences in the relative influences of drift and gene flow during their evolutionary history.