The basidiomycete Melampsora larici-populina causes foliar rust on Populus species from the sections Aigeiros and Tacamahaca, causing reduction in biomass production and economic losses. In the present study, samples of Icelandic M. larici-populina were collected for analysis of genetic diversity and population structure. A total of 439 isolates, collected at 15 locations, and analysed using 22 microsatellite markers were compared to data from French M. larici-populina populations. Twenty-one of the loci analysed were polymorphic, with an average of 3.4 alleles per locus. The mean observed and expected heterozygosities for all populations were 0.35 and 0.38. Evidence was found for a substructure within the Icelandic population with three subpopulations being the most likely scenario with low levels of gene flow. The population structure seen here is most likely shaped by both isolation and genetic drift as well as repeated events of colonization. In the future it can therefore be expected that regional poplar rust genotypes in Iceland change by two different modes; on one hand by transport of spores within the country and on the other hand by repeated colonization events. The results reported here underline the importance of closely monitoring the development of fungal diseases in Iceland, and to carefully select for resistance in Icelandic plant breeding programs.