Genetic diversity of a Eucalyptus occidentalis breeding population screened for salt and waterlogging tolerance was examined using eight microsatellite loci. Mating using an immature style ‘one stop pollination’ method between parents was carried out to produce progeny for testing under 500 mM salt waterlogging. The effect of parental genetic distance on seed production and early seedling survival was examined and inheritance of salt/or waterlogging tolerance was assessed by testing performance of progeny in comparison to parents. Diversity was moderate among the nine provenances and the families, and most of the diversity was distributed within rather than between families. Genetic relationships showed no structure in relation to provenance indicating any adaptation to saline environments has not affected genetic similarity. Breeding for salt and water tolerance may be achieved without decline in genetic diversity. There was a significant correlation between capsule production and parental genetic distance and a positive trend between increasing parental genetic distance and increasing number of germinated seeds/capsule, and seedling survival at 2 weeks and 9 months. These trends indicate expression of inbreeding depression in crosses between genetically similar parents. Heritability values, under 500 mM salt-waterlogging treatment, indicated that height had moderate heritability (h2 = 0.5). Crosses with the widest parental genetic distance produced progeny with considerable height increase above parents and this trend was evident even with moderate genetic distance indicating crossing at this level of differentiation may achieve optimum breeding gain.
