Aim Caridean shrimp are diverse and abundant inhabitants of seagrass beds. Anthropogenic disturbances have already reduced and fragmented seagrass habitat, and the rate of change is likely to increase in the future. It is therefore becoming increasingly important to build a basis of understanding of connectivity among populations of seagrass-associated fauna. Phycomenes zostericola is closely associated with seagrass and makes an ideal study species with which to explore patterns of connectivity and the influence of biogeographic boundaries and historical sea-level changes on seagrass-associated species. We hypothesized that strong currents and the high potential of P. zostericola for dispersal and adult movement would result, for the most part, in panmixia. We also hypothesized that if structure was evident, it would occur close to known biogeographic boundaries in Queensland. Location Phycomenes zostericola is an abundant shrimp species distributed throughout Queensland's seagrass habitats. Nineteen seagrass sites from the Torres Strait Islands and Queensland coastlines were sampled. Methods Molecular sequence data for a 590 base pair fragment of the mitochondrial gene cytochrome c oxidase subunit I (COI) was analysed for 279 specimens of P. zostericola. Phylogeographic patterns were analysed using nested clade phylogeographic analysis (NCPA); an isolation-by-distance effect was tested using a Mantel test; the effect of biogeographic boundaries was tested using an analysis of molecular variance (AMOVA), and also a spatial analysis of molecular variance (SAMOVA); demographic expansions were tested for using Tajima's D, Fu's FS and timing estimated using mismatch analysis; the timing of vicariant events was estimated using coalescent analysis (im program). Results Contrary to our original hypothesis, the strong marine currents are not a connective influence among populations of P. zostericola. Regional genetic structure and an isolation-by-distance effect are enhanced by existing coastal biogeographic boundaries. Population genetic structure and demographic history are intricately linked to the effects of a tumultuous Pleistocene sea-level history on the Queensland continental shelf. Main conclusions Connectivity diminishes among populations of P. zostericola over scales larger than a few hundred kilometres. As seagrass habitats world-wide become increasingly fragmented, low levels of connectivity will result in an isolated future for P. zostericola and other species reliant on seagrass as habitat.