Information on connectivity is becoming increasingly in demand as marine protected areas are being designed as an integral part of a network to protect marine resources at the ecosystem level. Larval dispersal and population structure, however, remain very difficult to assess. Here, we tested the predictions of a detailed oceanographic connectivity model of larval dispersal and coral recruitment within Palau and between Palau and Yap, which was developed to support the review of the existing network of marine protected areas in Palau. We used high throughput microsatellite genotyping of the coral Acropora hyacinthus to characterize population genetic structure. Pairwise F′ST values between Palau and Yap (0.10), Palau and Ngulu (0.09) and Yap and Ngulu (0.09) were all significant and similar to pairwise F′ST values of sites within Palau (0.02–0.12) and within Yap (0.02–0.09) highlighting structure at island scale and indicating that recruitment may be even more localized than previously anticipated. A bottleneck test did not reveal any signs of a founder effect between Yap and Palau. Overall, the data supports the idea that recovery of A. hyacinthus in Palau did not come exclusively from a single source but most likely came from a combination of areas, including sites within Palau. In light of these results there seems to be very little connectivity around the barrier reef and management recommendation would be to increase the number or the size of MPAs within Palau.