Hormosira banksii is distributed throughout southern Australasia, but dispersal of propagules is thought to be limited. In the present study, the hypothesis that outbreeding depression occurs in H. banksii was tested by assessing fertilisation success and early development of embryos in crosses between populations at local to regional spatial scales. Hierarchical experiments were conducted at three spatial scales with nesting present within each scale: small scale (within a rocky shore population), intermediate scale (regions separated by 70 km) and large scale (450-km separation between two states: Victoria and Tasmania). In each experiment, eggs and sperm were crossed within and between each population located in the spatial scale of interest. There were no consistent patterns of variable fertilisation success and subsequent development within a population or at different spatial scales. It was concluded that outbreeding depression is not detected in analyses of fertilisation success or early development processes in H. banksii. The results suggest one of the following to be likely: (1) H. banksii is capable of longer distance dispersal than previously considered, thus maintaining gene flow between distant populations, (2) gene flow is restricted by limited dispersal, but populations have not been isolated for a sufficient length of time to cause genetic divergence or (3) outbreeding depression is manifested as effects on later life-history stages.