The analysis of DNA using molecular techniques is an important tool for studies of evolutionary relationships, population genetics and genome organisation. The use of microsatellite genetic markers in marsupial studies is primarily limited by their availability and the success of amplification. Within this study, 29 macropodoid (kangaroos, wallabies and rat kangaroos) microsatellite loci were characterised in the tammar wallaby (Macropus eugenii) to evaluate the level of polymorphism and effects of cross-species amplification. Results indicated that 25 primer pairs amplified a single locus, with 21 exhibiting high levels of variability. The success of cross-species amplification was inversely proportional to the evolutionary distance between species. Therefore most macropodoid species can be studied using many of the available microsatellites, since source species are regularly distributed among macropodoid lineages. It was shown that M. eugenii had significantly (P < 0.01) reduced genetic diversity compared with source species. In addition, many microsatellite loci had reduced repeat arrays within M. eugenii, and all monomorphic loci sequenced had interruptions within the repeat arrays. The diversity differences are most likely caused by ascertainment bias in microsatellite selection for both length and purity. The results from this study highlight the need for caution when using genetic distance measures between divergent taxa, as the assumption of a specific mutation rate and/or type may be violated.