Historical sea levels have been influential in shaping the phylogeography of freshwater-limited taxa via palaeodrainage and palaeoshoreline connections. In this study, we demonstrate an approach to phylogeographic analysis incorporating historical sea-level information in a nested clade phylogeographic analysis (NCPA) framework, using burrowing freshwater crayfish as the model organism. Our study area focuses on the Bass Strait region of southeastern Australia, which is marine region encompassing a shallow seabed that has emerged as a land bridge during glacial cycles connecting mainland Australia and Tasmania. Bathymetric data were analysed using Geographical Information Systems (GIS) to delineate a palaeodrainage model when the palaeocoastline was 150 m below present-day sea level. Such sea levels occurred at least twice in the past 500 000 years, perhaps more often or of larger magnitude within the last 10 million years, linking Victoria and Tasmania. Inter-locality distance measures confined to the palaeodrainage network were incorporated into an NCPA of crayfish (Engaeus sericatus Clark 1936) mitochondrial 16S rDNA haplotypes. The results were then compared to NCPAs using present-day river drainages and traditional great-circle distance measures. NCPA inferences were cross-examined using frequentist and Bayesian procedures in the context of geomorphological and historical sea-level data. We found distribution of present-day genetic variation in E. sericatus to be partly explained not only by connectivity through palaeodrainages but also via present-day drainages or overland (great circle) routes. We recommend that future studies consider all three of these distance measures, especially for studies of coastally distributed species.