The benefits of composite rather than local seed provenances for ecological restoration have recently been argued, largely on the basis of maximizing evolutionary potential. However, these arguments have downplayed the potentially negative consequences of outbreeding depression once mixed provenances interbreed. In this study, we compared intraspecific F1 hybrid performance and molecular marker differentiation among four populations of Stylidium hispidum, a species endemic to Southwestern Australia. Multivariate ordination of 134 AFLP markers analyzed genetic structure and detected two clusters of paired sites that diverged significantly for marker variation along a latitudinal boundary. To test for outbreeding depression and to determine the consequences of molecular population divergence for hybrid fitness, we conducted controlled pollinations and studied germination and survival for three cross categories (within-population crosses, short- and long-distance F1 hybrids) for paired sites distributed within and between the two genetically differentiated regions. We found evidence of outbreeding depression in long-distance hybrids (111–124 km), and inbreeding depression among progeny of within-population crosses, relative to short-distance (3–10 km) hybrids, suggesting an intermediate optimal outcrossing distance in this species. These results are discussed in light of the evolutionary consequences of mixing seed sources for biodiversity restoration.