The distribution of genetic diversity and the genetic relationships among western Mediterranean horse breeds were investigated using microsatellite markers. The examined sample included seven Spanish and three Italian local horse breeds and populations, plus a Spanish Thoroughbred outgroup. The total number of animals examined was 682 (on average 62 animals per breed; range 20-122). The microsatellite marker set analysed provided 128 alleles (10.7 alleles per locus). Within-breed genetic diversity was always high (>0.70), with breeds contributing about 8% of the total genetic variability. The mean molecular coancestry of the entire population examined was 0.205, Losino being the breed that contributed most. In addition to Nei's standard and Reynolds' genetic distances, pair-wise kinship distance and molecular coancestry were estimated. Remarkably similar breed rankings were obtained with all methods. Clustering analysis provided an accurate representation of the current genetic relationships among the breeds. Determining coancestry is useful for analysing genetic diversity distribution between and within breeds and provides a good framework for jointly analysing molecular markers and pedigree information. An integrated analysis was undertaken to obtain information on the population dynamics in western Mediterranean native horse populations, and to better determine conservation priorities.