Inbreeding is common in small and threatened populations, and often has a negative effect on individual fitness and genetic diversity. Thus, inbreeding can be an important factor affecting the persistence of small populations. In this study we investigated the effects of inbreeding on fitness in a small, wild population of house sparrows (Passer domesticus) on the island of Aldra, Norway. The population was founded in 1998 by four individuals (one female and three males). After the founding event the adult population rapidly increased to about 30 individuals in 2001. At the same time the mean inbreeding coefficient among adults increased from 0 to 0.04 in 2001, and thereafter fluctuated between 0.06 and 0.10, indicating a highly inbred population. We found a negative effect of inbreeding on lifetime reproductive success which seemed to be mainly due to an effect of inbreeding on annual reproductive success. This resulted in selection against inbred females. However, the negative effect of inbreeding was less strong in males, suggesting that selection against inbred individuals is at least partly sex-specific. To examine whether individuals avoided breeding with close relatives we compared observed inbreeding and kinship coefficients in the population with those obtained from simulations of random mating. We found no significant differences between the two, indicating weak or absent inbreeding avoidance. We conclude that there was inbreeding depression in our population. Despite this, birds did not seem to actively avoid mating with close relatives, perhaps as a consequence of constraints on mating possibilities in such a small population.