A thorough understanding of the mutational mechanisms acting on microsatellite DNA, especially those caused by recombination, is essential to accurately interpret microsatellite genotyping data. In marsupials the Y chromosome does not undergo any recombination, while the X chromosome can recombine in XX females but not in XY males. Tammar wallaby (Macropus eugenii) samples were genotyped at 29 microsatellites originating from the X and Y chromosomes and chromosome 2. Allelic richness was positively correlated with repeat length. Controlling for repeat length, allelic richness was significantly lower on the Y chromosome than on chromosome 2, with the X chromosome intermediate. Reduced microsatellite diversity on the Y chromosome may reflect fewer mutations on the Y chromosome due to the lack of recombination. Alternatively, reduced Y chromosome diversity could be a consequence of demographic factors or the lower effective population size of the Y chromosome relative to autosomes. Small-pool PCR from sperm is currently being explored as a method to identify the types of mutations occurring at tammar wallaby microsatellites. This may provide further evidence for the role of recombination in the microsatellite mutation process. The discovery of reduced Y chromosome diversity in a wallaby may also need to be considered in the context of conservation management for this and related species.