Knowledge of processes that lead to genetic erosion for a range of species is important for conservation management. Relatively little work has assessed anthropogenic impacts on genetic variation in lizards. As part of our research program investigating effects of habitat fragmentation on Cunningham's skink (Egernia cunninghami), allelic diversity at 10 microsatellite loci was assessed in deforested and adjacent naturally vegetated habitats at two locations on the Central tablelands of NSW, Australia. Previously we have shown that deforestation is associated with significantly reduced dispersal, but not increased levels of inbreeding and homozygosity, presumably owing to strong kin avoidance in mate choice. However, in this study, two measures of allelic diversity, allelic richness and the ratio of allele number to size range, indicate that local levels of variability are lower in deforested habitats. Levels of allelic diversity may be expected to decrease more rapidly than levels of heterozygosity, thereby flagging potential longer-term problems, such as inbreeding depression or reduced recruitment because of mate limitation through strong inbreeding avoidance.