We investigate the utility of hypervariable microsatellite loci to measure genetic variability remaining in the northern hairy-nosed wombat, one of Australia's rarest mammals. This species suffered a dramatic range and population reduction over the past 120 years and now exists as a single colony of about 70 individuals at Epping Forest National Park, central Queensland. Because our preliminary research on mitochondrial DNA and multilocus DNA fingerprints did not reveal informative variation in this population, we chose to examine variation in microsatellite repeats, a class of loci known to be highly polymorphic in mammals. To assess the suitability of various wombat populations as a reference for comparisons of genetic variability and subdivision we further analysed mitochondrial DNA cytochrome b sequence, using phylogenetic methods. Our results show that appreciable levels of variation still exist in the Epping Forest colony although it has only 41% of the heterozygosity shown in a population of a closely-related species. From museum specimens collected in 1884, we also assessed microsatellite variation in an extinct population of the northern hairy-nosed wombat, from Deniliquin, New South Wales, 2000 km to the south of the extant population. The apparent loss of variation in the Epping Forest colony is consistent with an extremely small effective population size throughout its 120-year decline.