We provide the first description of the mating system, genetic structuring and dispersal in the Australian paper wasp, Polistes humilis. Individuals were collected from 13 colonies that were within 700 m of each other at a location near Sydney, Australia. Analysis of genotypic data from four microsatellite loci provided no evidence of males siring offspring in their natal colony and heterozygote excesses within most colonies suggest that this form of outbreeding is typical in P. humilis. The same data show that queens are singly mated and that the number of queens and therefore groups of full siblings increase with colony size. Consequently, genetic variation also increases with colony size. The relationship between the number of queens and colony size in P. humilis may be indicative of a breakdown in dominance hierarchies in larger colonies or a defence against disease transmission.