The genetic variability and population structure of three Bhutanese traditional horse breeds were assessed through genotyping of 74 horses (Boeta 25, Sharta 14 and Yuta 35) for 29 microsatellite DNA loci. Altogether, 282 alleles were detected across 29 polymorphic loci. The allelic diversity (NE) (Boeta 4.94; Sharta 4.65; Yuta 5.30) and gene diversities (HE) (Boeta 0.78; Sharta 0.77; Yuta 0.79) were high. None of the breeds deviated significantly from the Hardy-Weinberg equilibrium. There was no sign of significant population bottleneck for all the breeds. The inbreeding estimates (FIS) of the breeds were low (Boeta 0.023; Sharta 0.001; Yuta 0.021). Analysis of molecular variance showed 0.6% of the total genetic variation among breeds, 1.9% among individuals and 97.5% within individuals. The global FIT, FST, and FIS estimates for the population were 0.025, 0.006 and 0.019 respectively. The analysis of population structure failed to distinguish subpopulations in traditional horses and this was supported by a high genetic exchange among the breeds. Overall, the results of this study suggest a rich genetic diversity in the traditional horse despite a very low genetic differentiation among the breeds in Bhutan.