DNA sequences of the mitochondrial cytochrome c oxidase subunit I (COI) gene were collected from estuarine snails in the genus Phallomedusa to examine the effects of estuarine isolation on population structure and gene flow. Three clades were recovered, one corresponding to Phallomedusa austrina and two others with the morphology of Phallomedusa solida. The haplotype diversity in all three clades indicated recent population expansion. Phallomedusa austrina was restricted to the west of a previous land bridge in the Bass Strait between mainland Australia and Tasmania, and P. solida to its east and to northern Tasmania. Phylogeographic analysis of P. austrina and P. solida shows strong geographic separation of species, but no local genetic structure indicative of regional or estuarine isolation. The clades of P. solida exhibit substantial genetic divergence and were sympatric across their entire distribution in eastern Tasmania and mainland Australia. Such a situation, which has not previously been observed in phylogeographic studies of southeast Australia, suggests that P. solida has had a complex refugial history during periods of environmental challenge.