Infectious disease has been shown to be a major cause of population declines in wild animals. However, there remains little empirical evidence on the genetic consequences of disease-mediated population declines, or how such perturbations might affect demographic processes such as dispersal. Devil facial tumour disease (DFTD) has resulted in the rapid decline of the Tasmanian devil, Sarcophilus harrisii, and threatens to cause extinction. Using 10 microsatellite DNA markers, we compared genetic diversity and structure before and after DFTD outbreaks in three Tasmanian devil populations to assess the genetic consequences of disease-induced population decline. We also used both genetic and demographic data to investigate dispersal patterns in Tasmanian devils along the east coast of Tasmania. We observed a significant increase in inbreeding (F(IS) pre/post-disease -0.030/0.012, P<0.05; relatedness pre/post-disease 0.011/0.038, P=0.06) in devil populations after just 2-3 generations of disease arrival, but no detectable change in genetic diversity. Furthermore, although there was no subdivision apparent among pre-disease populations (θ=0.005, 95% confidence interval (CI) -0.003 to 0.017), we found significant genetic differentiation among populations post-disease (θ=0.020, 0.010-0.027), apparently driven by a combination of selection and altered dispersal patterns of females in disease-affected populations. We also show that dispersal is male-biased in devils and that dispersal distances follow a typical leptokurtic distribution. Our results show that disease can result in genetic and demographic changes in host populations over few generations and short time scales. Ongoing management of Tasmanian devils must now attempt to maintain genetic variability in this species through actions designed to reverse the detrimental effects of inbreeding and subdivision in disease-affected populations.