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The endemic New Zealand Hector's dolphin is considered the rarest species of marine dolphin with a total abundance of less than 4000. The species is listed as vulnerable because of fisheries-related mortality due to entanglement in set nets. The vulnerability of this species is further increased by its fidelity to local natal ranges and the genetic isolation of regional populations. Here we present evidence, based on 108 contemporary samples and 55 historical samples dating back to 1870, of a significant loss of mitochondrial DNA (mtDNA) diversity in two regional populations of Hector's dolphin. The haplotype diversity (h) was calculated from sequences of a 206 bp fragment in the mtDNA control region, designed to identify 13 out of the 14 known maternal lineages. Over the last 20 years, the North Island population has been reduced from at least three lineages (h = 0.41) to a single lineage (h = 0; p < 0.05). Given its small size, reproductive isolation and reduced genetic diversity, this population is likely to become extinct. The diversity of the East Coast South Island population has declined significantly from h = 0.65 to h = 0.35 (p < 0.05). Based on trend analysis of the mtDNA diversity, we predict that the East Coast population will lose all mtDNA diversity within the next 20 years. This time-series of reduction in genetic variation provides independent evidence of the severity of population decline and habitat contraction resulting from fisheries and perhaps other human activities.