Local adaptation can occur when spatially separated populations are subjected to contrasting environmental conditions. Historically, understanding the genetic basis of adaptation has been difficult, but increased availability of genome-wide markers facilitates studies of local adaptation in non-model organisms of conservation concern. The pygmy rabbit (Brachylagus idahoensis) is an imperiled lagomorph that relies on sagebrush for forage and cover. This reliance has led to widespread population declines following reductions in the distribution of sagebrush, leading to geographic separation between populations. In this study, we used >20,000 single nucleotide polymorphisms (SNPs), genotype-environment association methods, and demographic modeling to examine neutral genetic variation and local adaptation in the pygmy rabbit in Nevada and California. We identified 308 loci as outliers, many of which had functional annotations related to metabolism of plant secondary compounds. Likewise, patterns of spatial variation in outlier loci were correlated with landscape and climatic variables including proximity to streams, sagebrush cover, and precipitation. We found that populations in the Mono Basin of California likely diverged from other Great Basin populations during late Pleistocene climate oscillations, and that this region is adaptively differentiated from other regions in the southern Great Basin despite limited gene flow and low effective population size. Our results demonstrate that peripherally isolated populations can maintain adaptive divergence.