Worldwide, large areas of forest are being transformed to other land cover types and the resulting fragmented populations may suffer from restricted gene flow leading to genetic pauperization and increased inbreeding. To assess the genetic constitution of fragmented Polylepis australis mountain forests of central Argentina, analyses of the structure and diversity of ISSR markers were carried out for 90 trees distributed throughout five river basins with differing degrees of fragmentation. Overall, average polymorphism (P) ranged between 87.2 and 94.9% (95% criterion) while marker diversity index (M) varied between 0.35 and 0.39; values which are comparable with other wind-pollinated tree species. Analysis of molecular variance (AMOVA) revealed that most genetic variation occurred within river basins (97.8%), with only a little occurring between river basins (2.2%; ΦST = 0.02). In addition, Mantel’s test indicated that P. australis does not follow the usual pattern of isolation by distance; instead the UPGMA method showed that trees from the two most degraded river basins formed a group while trees from the three better preserved basins formed another. As such, either effective pollen flow has maintained high levels of genetic diversity, or present day genetic variability is a remnant of a recently fragmented ancestral panmictic population. We conclude that, at present, genetic degradation in P. australis populations of central Argentina is not as important as ecological degradation – such as soil loss, intensive browsing by livestock or increased frequencies of wildfires, and that genetic variability is still fully available for forest restoration.