The kākāpō is a flightless parrot endemic to New Zealand. Once common in the archipelago, only 201 individuals remain today, most of them descending from an isolated island population. We report the first genome-wide analyses of the species, including a high-quality genome assembly for kākāpō, one of the first chromosome-level reference genomes sequenced by the Vertebrate Genomes Project (VGP). We also sequenced and analyzed 35 modern genomes from the sole surviving island population and 14 genomes from the extinct mainland population. While theory suggests that such a small population is likely to have accumulated deleterious mutations through genetic drift, our analyses on the impact of the long-term small population size in kākāpō indicate that present-day island kākāpō have a reduced number of harmful mutations compared to mainland individuals. We hypothesize that this reduced mutational load is due to the island population having been subjected to a combination of genetic drift and purging of deleterious mutations, through increased inbreeding and purifying selection, since its isolation from the mainland ∼10,000 years ago. Our results provide evidence that small populations can survive even when isolated for hundreds of generations. This work provides key insights into kākāpō breeding and recovery and more generally into the application of genetic tools in conservation efforts for endangered species.