Anthropogenic habitat loss and fragmentation have been implicated in the endangerment and extinction of many species. Here we assess genetic variation and demographic history in the southernmost population of giant pandas (Ailuropoda melanoleuca) that continues to be threatened by habitat degradation and fragmentation, using noninvasive genetic sampling, mitochondrial control region sequence and 12 microsatellite loci. Compared to other giant panda populations, this population has medium-level genetic diversity based on the measure of both mitochondrial and nuclear markers. Mitochondrial DNA-based demographic analyses revealed that no historical population expansion or contraction has occurred, indicating a relatively stable population size. However, a Bayesian-coalescent method based on the observed allele distribution and allele frequencies of microsatellite clearly did detect, quantify and date a recent decrease in population size. Overall, the results indicate that a population contraction in the order of 95-96% has taken place over the last 910-999 years and is most likely due to anthropogenic habitat loss. These findings highlight the need for a greater focus on habitat protection and restoration for the long-term survival of this giant panda population.