We used microsatellite and mtDNA markers to compare colony and population genetics of two sympatric species of subterranean termites, Reticulitermes flavipes (Kollar) (n = 25 colonies) and R. hageni Banks (n = 16 colonies), in two sites located 27 km apart in the Piedmont of central North Carolina. Colony breeding structure was inferred by examination of microsatellite genotypes of workers within colonies and by estimates of nestmate relatedness and hierarchical F-statistics. Similar to previous results on this species, nearly one-half of the R. flavipes colonies were simple families mainly headed by outbred primary (alate-derived) reproductives, about one-half were comprised of extended (inbred) families inferred to be headed by low numbers of neotenics (non alate-derived secondary reproductives) descended from the original primary pair, and two colonies contained the offspring of multiple reproductives. About two-thirds of the R. hageni colonies were comprised of simple families largely headed by related reproductives, and about one-third consisted of extended families headed by low numbers of neotenics. R. hageni differed from R. flavipes in having significant isolation by distance at one site as well as significant differentiation between sites at both the microsatellite and mtDNA markers. We conclude that dispersal in R. hageni is more limited resulting in higher levels of inbreeding within colonies and greater degrees of population genetic structure at small and large spatial scales than in sympatric populations of R. flavipes. These results indicate that closely related species of subterranean termites occurring in the same habitat can differ in their breeding systems with important consequences for higher level genetic structure.