Cordyceps sinensis is one of the most valuable medicinal caterpillar fungi native to China. However, its productivity is extremely limited and the species is becoming endangered. The genetic diversity of eighteen C. sinensis populations across its major distributing regions in China was evaluated by inter-simple sequence repeat (ISSR) markers. A total of 141 markers were produced in 180 individuals from the 18 populations, of which 99.3% were polymorphic. The low average of Shannon (0.104) and Nei index (0.07) of the 18 populations indicates that there are little genetic variations within populations. For all 18 populations, estimates of total gene diversity (H(T)), gene diversity within populations (H(S)), coefficient of genetic differentiation (G(ST)), and gene flow (Nm) were 0.170, 0.071, 0.583, and 0.357, respectively. This pattern suggests that the genetic diversity of C. sinensis is low and most of the ISSR variations are found among populations with little gene exchange. The 18 populations are divided into five groups based on the genetic distance and the grouping pattern matches with the geographic distribution along the latitudinal gradient. The five groups show obvious difference in the G(ST) and Nm values. Therefore, the genetic diversification of C. sinensis populations may be determined by geographic isolation and the combined effects of life history characters and the interaction with host insect species. The information illustrated by this study is useful for selecting in situ conservation sites of C. sinensis.