Popular sires, a limited population size, and the founder event are widely considered the main reasons for the low genetic diversity observed in many dog breeds. However, these factors have had only a small role in the historic decrease in diversity observed in the Norfolk Terrier breed. We show that the decrease in this breed has been mainly due to large, popular kennels. Dogs from these kennels have, on average, larger genetic contributions to subsequent generations than others. A test for the presence of a popular kennel effect is proposed and applied (P < 0.001). These kennels were found to be the same as nuclei of selection existing in other livestock species. This result revealed a hierarchical structure of dog breeding schemes, with an asymmetric gene flow predominantly from the nuclei toward the main population. Possible reasons for this structure and implications for future population management are discussed. The main reason is probably that the breed type was established by large, popular kennels and that small kennel breeders used their stud dogs to benefit from the achievements of the popular kennels. Many kennels, however, were unable to make their own substantial genetic contributions to the breed.