Rear‐edge populations of cold‐adapted species are highly vulnerable to climate change, their adaptations maybe critical for the persistence of the species as a whole. Using AFLP, we investigated population genetic diversity and differentiation of Scotch argus (Erebia aethiops), a cold‐adapted butterfly, comparing isolated rear‐edge and core populations in Britain, a relict part of the species range. We also examined genetic differences among sub‐populations and dispersal distances conducting a mark‐release‐recapture (MRR) study at the rear‐edge. Genetic diversity was higher in the isolated rear‐edge populations than populations at the core of the range and declined with latitude, supporting the idea that current differences in genetic diversity levels across Britain are likely the result of historical range changes after the last glaciation. Populations were genetically differentiated among regions, meaning that losing the isolated rear‐edge populations may prove detrimental for the survival of the species in Britain, as these populations are likely to be better adapted to warmer climates. We found that the largest population at the rear‐edge is genetically robust, with gene flow among patches, likely maintained by males as indicated by the higher dispersal distances recorded for males in the MRR, but colonisation of empty patches is constrained by females' low mobility. Our results highlight that isolated populations at the rear‐edge of cold‐adapted species should be considered of high conservation priority, as they hold higher levels of genetic diversity and differentiation which may prove to be key for the survival of these species under global warming.