The greater bilby, Macrotis lagotis, is a species of conservation significance in the arid and semiarid zones of Australia. A species recovery program has been underway since the mid-1990s but the incorporation of molecular genetic data within the program has been difficult due to the problems of obtaining regular, population-wide samples of this trap-shy and sparsely distributed species. In this study, we demonstrate that faecal pellets collected from around burrows in the dry, arid habitat of western Queensland provide a viable source for DNA extraction and analysis. Faecal DNA was used to generate population-level estimates of microsatellite and mtDNA diversity for comparison with previous estimates for the natural population derived from tissue samples. Data were used to assess both the reliability of faecal-derived genotypes and the extent of any diversity loss since the previous study. Microsatellite diversity recorded from eight polymorphic markers for the natural population (A = 4.31 ± 0.30, H_E = 0.76 ± 0.03) was comparable with the previous study, indicating little change in genetic diversity for the natural population in the 10-year interim. Faecal genotypes generated for the recently reintroduced population matched the known number of founders as well as a known genotype, providing support for the reliability of the faecal DNA approach. The captive and reintroduced populations had significantly lower diversity levels than the natural population (A = 3.59 ± 0.28, H_E = 0.68 ± 0.03; A = 3.57 ± 0.20, H_E = 0.65 ± 0.03 respectively). Mitochondrial control region analysis, incorporating nested clade phylogeographic analysis (NCPA), agrees with earlier findings that populations of bilbies across the arid zone in Australia have only recently become fragmented, but the case for Queensland bilbies being strongly differentiated from other regions is diminished. Implications from this study include the need to further supplement the captive and reintroduced populations with additional out-bred individuals and that faecal DNA can be used effectively for ongoing monitoring and management of this species.