Assessing patterns of genetic structure and diversity of threatened species has become an essential tool for determining conservation status and designing management strategies. We examine the genetic structure of the Sierra Madre sparrow (Xenospiza baileyi), a species restricted to fragmented patches of subalpine bunchgrass in three small isolated areas of northwestern and central Mexico. Coding and non-coding regions of mtDNA (1,878 bp) from individuals of the only three known populations revealed the existence of a single major lineage, with closely related haplotypes being shared between populations across the range. The sharing of haplotypes between the distant northwest and central populations (*800 km) suggests a recent fragmentation of a formerly contiguous population. Despite a lack of large-scale phylogeographic structure, haplotype frequencies at local scales revealed significant genetic differentiation and high F ST values between all three remaining populations, even between localities separated by less than 12 km. These results suggest restricted gene flow and limited dispersal, likely due to the species' inability to cross areas of unsuitable habitat. On the basis of genetic interchange and ecological equivalence criteria, we recommend that the species be managed as a single unit, permitting the strengthening of the small population in the northwest with individuals from central Mexico, and/or the translocation of individuals to new areas of suitable habitat.