Termites (Isoptera) comprise a large and important group of eusocial insects, yet, in contrast to the eusocial Hymenoptera (ants, bees, wasps), the breeding systems of termites remain poorly understood. In this study, I inferred the breeding system of the subterranean termite Reticulitermes flavipes based on colony and population genetic structure as determined from microsatellite and mitochondrial DNA markers. Termites were sampled from natural wood debris from three undisturbed, forested sites in central North Carolina. In each site, two transects separated by 1 km were sampled at approximately 15-m intervals. A total of 1272 workers collected from 57 collection points were genotyped at six microsatellite loci, and mitochondrial DNA haplotype was determined for a subset of these individuals using either restriction fragment length polymorphism or sequence variation in the AT-rich region. Colonies appeared to be localized: workers from the 57 collection points represented 56 genetically distinct colonies with only a single colony occupying two collection points located 15 m apart. Genetic analysis of family structure and comparisons of estimates of F-statistics (F_IT, F_IC, F_CT) and coefficients of relatedness (r) among nestmate workers with results of computer simulations of potential breeding systems suggested that 77% of all colonies were simple families headed by outbred monogamous pairs, whereas the remaining colonies were extended (inbred) families headed by low numbers of neotenics (about two females and one male) who were the direct offspring of the colony founders. There was no detectable isolation by distance among colonies along transects, suggesting that colony reproduction by budding is not common and that dispersal of reproductives during mating flights is not limited over this distance. Higher-level analysis of the microsatellite loci indicated weak but significant differentiation among sites (F_ST = 0.06), a distance of 16–38 km, and between transects within sites (F_ST = 0.06), a distance of 1 km. No significant differentiation at either the transect or site level was detected in the mitochondrial DNA sequence data. These results indicate that the study populations of R. flavipes have a breeding system characterized by monogamous pairs of outbred reproductives and relatively low levels of inbreeding because most colonies do not live long enough to produce neotenics, and those colonies that do generate neotenics contain an effectively small number of them.