To better understand natural genetic variation in indigenous livestock resources, as well as formulate conservation policies, better genetic characterization is required to balance the competing needs of genetic improvement and conservation of native germplasm, primarily in rural agricultural systems in developing countries. Genetic diversity of goats in southern Nigeria was assessed using 295 indigenous goats with ten microsatellite DNA markers. The breeds are West African Dwarf (WAD), Red Sokoto (RS) and Sahel (SA) sampled from farms, market places and rural homesteads. The mean expected heterozygosity (HE) ranged from 0.608 to 0.784 in two sub-populations of WAD goats. Deviations from Hardy–Weinberg equilibrium (HWE) were statistically significant (p < 0.05) indicating that these populations are under various forces stemming from the management choices of rural dwellers. Polymorphic information content of these markers averaged 0.803 and mean GST index was 0.176. The measure of genetic distance between pairs of breeds indicated that the lowest distance was between WAD and RS (0.268) and the highest distance was between WAD and SA (0.662) goats, respectively. The estimated dendogram clustered these Nigerian goats into nine sub-populations and two major genetic groups. The study suggests that indigenous goat populations in southern Nigeria may be collapsed from three breeds into two distinct genetic groups, possibly due to extensive cross-breeding and gene flow between them, which are symptomatic of uncontrolled crossing across much of the country.