Microsatellite null alleles are commonly encountered in population genetics studies, yet little is known about their impact on the estimation of population differentiation. Computer simulations based on the coalescent were used to investigate the evolutionary dynamics of null alleles, their impact on FST and genetic distances, and the efficiency of estimators of null allele frequency. Further, we explored how the existing method for correcting genotype data for null alleles performed in estimating FST and genetic distances, and we compared this method with a new method proposed here (for FST only). Null alleles were likely to be encountered in populations with a large effective size, with an unusually high mutation rate in the flanking regions, and that have diverged from the population from which the cloned allele state was drawn and the primers designed. When populations were significantly differentiated, FST and genetic distances were overestimated in the presence of null alleles. Frequency of null alleles was estimated precisely with the algorithm presented in Dempster et al. (1977). The conventional method for correcting genotype data for null alleles did not provide an accurate estimate of FST and genetic distances. However, the use of the genetic distance of Cavalli-Sforza and Edwards (1967) corrected by the conventional method gave better estimates than those obtained without correction. FST estimation from corrected genotype frequencies performed well when restricted to visible allele sizes. Both the proposed method and the traditional correction method have been implemented in a program that is available free of charge at http://www.montpellier.inra.fr/URLB/. We used 2 published microsatellite data sets based on original and redesigned pairs of primers to empirically confirm our simulation results.