The extent to which free-living microorganisms exist in geographically isolated, genetically distinct populations is a subject of continuing debate. Some authorities contend that many microorganisms have cosmopolitan distributions, while others provide evidence that more limited geographical distribution of genetically distinct populations can occur. We report the occurrence of two morphologically similar, but genetically distinct, populations of the microbial eukaryote Peridinium limbatum (Stokes) Lemmermann from neighboring Northern Wisconsin freshwater bodies. Five strains of P. limbatum were cultured by single-cell isolation from both Crystal Lake and Crystal Bog (Oneida Co., WI). Genetic variation between the two populations encompassed 8.9% (mean of 35.4 of 397 nucleotides) of the nuclear ribosomal DNA internal transcribed spacer (ITS1 and ITS2) region. In contrast, 0.5% (mean of 2.25 of 397 nucleotides) variation was observed within the Crystal Lake population and 0.3% (mean of 1.21 of 397 nucleotides), within the Crystal Bog population. This difference between the two populations was highly statistically significant (p-value << 0.001). The extent of genetic variation between the two P. limbatum populations was greater than that reported in the literature for some morphologically distinguishable microalgal species, suggesting the occurrence of cryptic sister species. On the other hand, hybrid sequences obtained from one of the Crystal Lake strains suggest that the two populations may still be members of a single sexually compatible biological species. Our data suggest that the two neighboring P. limbatum populations may be diverging genetically under conditions of limited gene flow, suggesting a mechanism for the origin of geographically isolated, genetically distinct populations of microbial eukaryotes.