Habitat loss and associated fragmentation effects are well-recognised threats to biodiversity. Loss of functional connectivity (mobility, gene flow and demographic continuity) could result in population decline in altered habitat, because smaller, isolated populations are more vulnerable to extinction. We tested whether substantial habitat reduction plus fragmentation is associated with reduced gene flow in three decliner woodland-dependent bird species (eastern yellow robin, weebill and spotted pardalote) identified in earlier work to have declined disproportionately in heavily fragmented landscapes in the Box-Ironbark forest region in north-central Victoria, Australia. For these three decliners, and one tolerant species (striated pardalote), we compared patterns of genetic diversity, relatedness, effective population size, sex-ratios and genic (allele frequency) differentiation among landscapes of different total tree cover, identified population subdivision at the regional scale, and explored fine-scale genotypic (individual-based genetic signature) structure. Unexpectedly high genetic connectivity across the study region was detected for decliner and tolerant species. Power analysis simulations suggest that moderate reductions in gene flow should have been detectable. However, there was evidence of local negative effects of reduced habitat extent and structural connectivity: slightly lower effective population sizes, lower genetic diversity, higher within-site relatedness and altered sex-ratios (for weebill and eastern yellow robin) in 10 x 10 km landscapes with low vegetation cover. We conclude that reduced structural connectivity in the Box-Ironbark ecosystem may still allow sufficient gene flow to avoid the harmful effects of inbreeding in our study species. Although there may still be negative consequences of fragmentation for demographic connectivity, the high genetic connectivity of mobile bird species in this system suggests that reconnecting isolated habitat patches may be less important than increasing habitat extent and/or quality if these need to be traded off.