Kin associations increase the potential for inbreeding. The potential for inbreeding does not, however, make inbreeding inevitable. Numerous factors influence whether inbreeding preference, avoidance, or tolerance evolves, and, in hermaphrodites where both self-fertilization and biparental inbreeding are possible, it remains particularly difficult to predict how selection acts on the overall inbreeding strategy, and to distinguish the type of inbreeding when making inferences from genetic markers. Therefore, we undertook an empirical analysis on an understudied type of mating system (spermcast mating in the marine bryozoan, Bugula neritina) that provides numerous opportunities for inbreeding preference, avoidance, and tolerance. We created experimental crosses, containing three generations from two populations to estimate how parental reproductive success varies across parental relatedness, ranging from self, siblings, and non-siblings from within the same population. We found that the production of viable selfed offspring was extremely rare (only one colony produced three selfed offspring), and biparental inbreeding more common. Paternity analysis using 16 microsatellite markers confirmed outcrossing. The production of juveniles was lower for sib mating compared to non-sib mating. We found little evidence for consistent inbreeding, in terms of non-random mating, in adult samples collected from three populations, using multiple population genetic inferences. Our results suggest several testable hypotheses that potentially explain the overall mating and dispersal strategy in this species, including early inbreeding depression, inbreeding avoidance through cryptic mate choice, and differential dispersal distances of sperm and larvae.