An island model of migration is used to study the effects of subdivision within populations and species on sample genealogies and on between-population or between-species measures of genetic variation. The model assumes that the number of demes within each population or species is large. When populations (or species), connected either by gene flow or historical association, are themselves subdivided into demes, changes in the migration rate among demes alter both the structure of genealogies and the time scale of the coalescent process. The time scale of the coalescent is related to the effective size of the population, which depends on the migration rate among demes. When the migration rate among demes within populations is low, isolation (or speciation) events seem more recent and migration rates among populations seem higher because the effective size of each population is increased. This affects the probability of reciprocal monophyly of two samples, the chance that a gene tree of a sample matches the species tree, and relative likelihoods of different types of polymorphic sites. It can also have a profound effect on the estimation of divergence times.