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Aim Patterns of genetic variation within forest species are poorly documented in island ecosystems. The distribution of molecular variation for Santalum insulare, an endangered tree species endemic to the islands of eastern Polynesia, was analysed using chloroplast microsatellite markers. The aims were to quantify the genetic diversity; to assess the genetic structure; and to analyse the geographical distribution of the diversity within and between archipelagoes. The ultimate goal was to pre-define evolutionary significant units (ESUs) for conservation and restoration programmes of this species, which constitutes a natural resource on small, isolated islands. Location Eleven populations, each representative of one island, covering most of the natural occurrence of S. insulare were sampled: five populations from the Marquesas Archipelago; three from the Society Archipelago; and three from the Cook–Austral Archipelago. These South Pacific islands are known for their high degree of plant endemism, and for their human occupation by Polynesian migrations. The extensive exploitation of sandalwood by Europeans nearly 200 years ago for its fragrant heartwood, used overseas in incense, carving and essential oil production for perfume, has dramatically reduced the population size of this species. Methods We used chloroplast microsatellites, which provide useful information in phylogeographical forest tree analyses. They are maternally inherited in most angiosperms and present high polymorphism. Among the 499 individuals sampled, 345 were genotyped successfully. Classical models of population genetics were used to assess diversity parameters and phylogenetic relationships between populations. Results Four microsatellite primers showed 16 alleles and their combinations provided 17 chlorotypes, of which four exhibited a frequency > 10% in the total population. The gene diversity index was high for the total population ( He = 0.82) and varied among archipelagoes from He = 0.40 to 0.67. Genetic structure is characterized by high levels of differentiation between archipelagoes (36% of total variation) and between islands, but differentiation between islands varied according to archipelago. The relationship between genetic and geographical distance confirms the low gene flow between archipelagoes. The minimum spanning tree of chlorotypes exhibits three clusters corresponding to the geographical distribution in the three main archipelagoes. Main conclusions The high level of diversity within the species was explained by an ancient presence on and around the hotspot traces currently occupied by young islands. Diversity in the species has enabled survival in a range of habitats. Relationships between islands show that the Cook–Austral chlorotype cluster constitutes a link between the Marquesas and the Society Islands. This can be explained by the evolution of the island systems over millions of years, and extinction of intermediary populations on the Tuamotu Islands following subsidence there. Based on the unrooted neighbour-joining tree and on the genetic structure, we propose four ESUs to guide the conservation and population restoration of Polynesian Sandalwood: the Society Archipelago; the Marquesas Archipelago; Raivavae Island; and Rapa Island. [ABSTRACT FROM AUTHOR]