Pelagic dispersal of larvae in sessile marine invertebrates could in principle lead to a homogeneous gene pool over vast distances, yet there is increasing evidence of surprisingly high levels of genetic differentiation on small spatial scale. To evaluate whether larval dispersal is spatially limited and correlated with distance, we conducted a study on the widely distributed, viviparous reef coral Seriatopora hystrix from the Red Sea where we investigated ten populations separated between ∼0.150 km and ∼610 km. We addressed these questions with newly developed, highly variable microsatellite markers. We detected moderate genetic differentiation among populations based on both F and R (0.089 vs. 0.136, respectively) as well as considerable heterozygote deficits. Mantel tests revealed isolation by distance effects on a small geographic scale (≤ 20 km), indicating limited dispersal of larvae. Our data did not reveal any evidence against strictly sexual reproduction among the studied populations.