Habitat fragmentation caused by human activities alters metapopulation dynamics and decreases biological connectivity through reduced migration and gene flow, leading to lowered levels of population genetic diversity and to local extinctions. The threatened Yarra pygmy perch, Nannoperca obscura, is a poor disperser found in small, isolated populations in wetlands and streams of southeastern Australia. Modifications to natural flow regimes in anthropogenically-impacted river systems have recently reduced the amount of habitat for this species and likely further limited its opportunity to disperse. We employed highly resolving microsatellite DNA markers to assess genetic variation, population structure and the spatial scale that dispersal takes place across the distribution of this freshwater fish and used this information to identify conservation units for management. The levels of genetic variation found for N. obscura are amongst the lowest reported for a fish species (mean heterozygosity of 0.318 and mean allelic richness of 1.92). We identified very strong population genetic structure, nil to little evidence of recent migration among demes and a minimum of 11 units for conservation management, hierarchically nested within four major genetic lineages. A combination of spatial analytical methods revealed hierarchical genetic structure corresponding with catchment boundaries and also demonstrated significant isolation by riverine distance. Our findings have implications for the national recovery plan of this species by demonstrating that N. obscura populations should be managed at a catchment level and highlighting the need to restore habitat and avoid further alteration of the natural hydrology.