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Thirty microsatellite markers were analysed in 1426 goats from 45 traditional or rare breeds in 15 European and Middle Eastern countries. In all populations inbreeding was indicated by heterozygosity deficiency (mean FIS = 0.10). Genetic differentiation between breeds was moderate with a mean FST value of 0.07, but for most (c. 71%) northern and central European breeds, individuals could be assigned to their breeds with a success rate of more than 80%. Bayesian-based clustering analysis of allele frequencies and multivariate analysis revealed at least four discrete clusters: eastern Mediterranean (Middle East), central Mediterranean, western Mediterranean and central/northern Europe. About 41% of the genetic variability among the breeds could be explained by their geographical origin. A decrease in genetic diversity from the south-east to the north-west was accompanied by an increase in the level of differentiation at the breed level. These observations support the hypothesis that domestic livestock migrated from the Middle East towards western and northern Europe and indicate that breed formation was more systematic in north-central Europe than in the Middle East. We propose that breed differentiation and molecular diversity are independent criteria for conservation.