The conservation of threatened and rare mammal species through translocation to islands is currently being advocated in Australia (Abbott, 2000). The program which introduced koalas to French Is. and subsequently reintroduced them back to the Victorian mainland has successfully re-established the species throughout most of its former range in south-eastern Australia. From a demographic perspective, this program has achieved its goals, and koalas are now common in this region of Australia. Koalas from French Is. were also introduced to areas outside their former range at Kangaroo Is., Mt Lofty Ranges and the Eyre Peninsula. Subsequently, as predicted by Wright (1931, 1977), a reduction in genetic variation has occurred in these populations as a consequence of this founding history, which our study demonstrates is significantly correlated with testicular abnormalities. We revealed that levels of allelic diversity are significantly lower in the Kangaroo Is. and Eyre Peninsula populations relative to the Strzelecki population in Victoria, as expected from their population history. Overall, the level of allelic diversity present in the South Australian populations (A = 2.1) was more than fivefold lower than values reported for relatively unperturbed north-eastern populations from Queensland and New South Wales (A = 11.5) (Houlden et al., 1996).