High levels of genetic diversity in Plasmodium falciparum populations are an obstacle to malaria control. Here, we investigate the relationship between local variation in malaria epidemiology and parasite genetic diversity in Papua New Guinea (PNG). Cross-sectional malaria surveys were performed in 14 villages spanning four distinct malaria-endemic areas on the north coast, including one area that was sampled during the dry season. High-resolution msp2 genotyping of 2,147 blood samples identified 761 P. falciparum infections containing a total of 1,392 clones whose genotypes were used to measure genetic diversity. Considerable variability in infection prevalence and mean multiplicity of infection was observed at all of the study sites, with the area sampled during the dry season showing particularly striking local variability. Genetic diversity was strongly associated with multiplicity of infection but not with infection prevalence. In highly endemic areas, differences in infection prevalence may not translate into a decrease in parasite population diversity.