Island populations are convenient models of large-scale evolutionary processes and provide natural replicates of evolution. Recently founded island populations also provide an opportunity to study populations derived from few individuals, and these populations, in particular, often show rapid diversification. Here we report morphological and molecular data for the túngara frog, Physalaemus pustulosus, from three different islands of Panama: Coiba, a large island with a rather old túngara frog population; Isla Grande, a small island with a fairly recent population of túngara frogs, and Barro Colorado Island (BCI), a large island artificially created by flooding to form the Panama Canal about 100 yr ago. Frogs from the two natural islands, but not those from BCI, were significantly larger than frogs from the mainland, which is consistent with the “island rule” stating that small species on islands tend to be larger while large species tend to be smaller than their mainland relatives. Genetic diversity, estimated from allelic richness at seven microsatellite loci, was drastically reduced in the Isla Grande population, whereas heterozygosity was not reduced. This result suggests that this island population of frogs went through a severe and recent bottleneck.