Despite their narrow distribution, Australian rainforests still contain considerable levels of diversity and include many ancient, but often rare, lineages. Very little is known about the general biology of rainforest species, yet their long-term management depends on a better understanding of the main factors leading to rarity. For instance, are they highly endemic taxa, at the early stages of expansion, nearing the end of a period of decline, or persisting at low numbers over the long term? In this study we combine molecular, environmental, and ecological data to identify the factors responsible for the narrow distribution of a paleoendemic rainforest tree: Elaeocarpus sedentarius (Elaeocarpaceae). Between-population and between-generation comparisons of genetic diversity across all known populations of E. sedentarius show evidence of mutation-drift equilibrium rather than evidence of a recent bottleneck. Similarly, floristic and environmental data negate the hypothesis of rarity as a consequence of highly specialized habitat requirements. Instead, genetic structure and the available ecological data support the hypothesis of dispersal limitation as the main cause of endemism and that the species may have attained genetic equilibrium without realizing its full niche potential. We suggest that these factors are likely to explain narrow endemism in a broader range of taxa.