The endangered Mexican wolf (Canis lupus baileyi) is known to carry exceedingly low levels of genetic diversity. This could be (i) the result of long-term evolutionary patterns as they exist at the southernmost limit of the species distribution at a relatively reduced effective size, or (ii) due to rapid population decline caused by human persecution over the last century. If the former, purifying selection is expected to have minimized the impact of inbreeding. If the latter, rapid and recent declines in genetic diversity may have resulted in severe fitness consequences. To differentiate these hypotheses, we conducted comparative whole-genome analyses of five historical Mexican wolves (1907–1917) and 18 contemporary Mexican and grey wolves from North America and Eurasia. Based on whole-genome data, historical and modern Mexican wolves together form a discrete unit. Moreover, we found that modern Mexican wolves have reduced genetic diversity and increased inbreeding relative to the historical population, which was widespread across the southwestern United States and not restricted to Mexico as previously assumed. Finally, although Mexican wolves have evolved in sympatry with coyotes (C. latrans), we observed lower introgression between historical Mexican wolves and coyotes than with modern Mexican wolves, despite similarities in body size. Taken together, our data show that recent population declines probably caused the reduced level of genetic diversity, but not the observed differentiation of the Mexican wolves from other North American wolves.