Population-level consequences of dispersal ability remain poorly understood, especially for marine animals in which dispersal is typically considered a species-level trait governed by oceanographic transport of microscopic larvae. Transitions from dispersive (planktotrophic) to non-dispersive, aplanktonic larvae are predicted to reduce connectivity, genetic diversity within populations, and the spatial scale at which reproductive isolation evolves. However, larval dimorphism within a species is rare, precluding population-level tests. We show the sea slug Costasiella ocellifera expresses both larval morphs in Florida and the Caribbean, regions with divergent mitochondrial lineages. Planktotrophy predominated at 11 sites, 10 of which formed a highly connected and genetically diverse Caribbean metapopulation. Four populations expressed mainly aplanktonic development and had markedly reduced connectivity, and lower genetic diversity at one mitochondrial and six nuclear loci. Aplanktonic dams showed partial post-zygotic isolation in most inter-population crosses, regardless of genetic or geographic distance to the sire's source, suggesting outbreeding depression affects fragmented populations. Dams from genetically isolated and neighboring populations also exhibited pre-mating isolation, consistent with reinforcement contingent on historical interaction. By increasing self-recruitment and genetic drift, the loss of dispersal may thus initiate a feedback loop resulting in the evolution of reproductive isolation over small spatial scales in the sea.