In an effort to elucidate the evolutionary mechanisms that determine the genetic architecture of a species, we have analyzed 17 populations of the microcrustacean Daphnia pulex for levels of genetic variation at the level of life-history characters and molecular markers in the nuclear and mitochondrial genomes. This species is highly subdivided, with approximately 30% of the variation for nuclear molecular markers and 50% of the variation for mitochondrial markers being distributed among populations. The average level of genetic subdivision for quantitative traits is essentially the same as that for nuclear markers, which superficially suggests that the life-history characters are diverging at the neutral rate. However, the existence of a strong correlation between the levels of population subdivision and broadsense heritabilities of individual traits argues against this interpretation, suggesting instead that the among-population divergence of some quantitative traits (most notably body size) is being driven by local adaptation to different environments. The fact that the mean phenotypes of the individual populations are also strongly correlated with local levels of homozygosity indicates that variation in local inbreeding plays a role in population differentiation. Rather than being a passive consequence of local founder effects, levels of homozygosity may be selected for directly for their effects on the phenotype (adaptive inbreeding depression). There is no relationship between the levels of variation within populations for molecular markers and quantitative characters, and this is explained by the fact that the average standing genetic variation for life-history characters in this species is equivalent to only 33 generations of variation generated by mutation.