The distribution of a species is a complex expression of its ecological and evolutionary history and integrating population genetic, environmental, and ecological data can provide new insights into the effects of the environment on the population structure of species. Previous work demonstrated strong patterns of genetic differentiation in natural populations of the hermaphroditic nematode Pristionchus pacificus in its La Réunion Island habitat, but gave no clear understanding of the role of the environment in structuring this variation. Here, we present what is to our knowledge the first study to statistically evaluate the role of the environment in shaping the structure and distribution of nematode populations. We test the hypothesis that genetic structure in P. pacificus is influenced by environmental variables, by combining population genetic analyses of microsatellite data from 18 populations and 370 strains, with multivariate statistics on environmental data, and species distribution modelling. We assess and quantify the relative importance of environmental factors (geographic distance, altitude, temperature, precipitation, and beetle host) on genetic variation among populations. Despite the fact that geographic populations of P. pacificus comprise vast genetic diversity sourced from multiple ancestral lineages, we find strong evidence for local associations between environment and genetic variation. Further, we show that significantly more genetic variation in P. pacificus populations is explained by environmental variation than by geographic distances. This supports a strong role for environmental heterogeneity vs. genetic drift in the divergence of populations, which we suggest may be influenced by adaptive forces.