BACKGROUND: The Plasmodium falciparum merozoite surface protein Pf38 is targeted by antibodies of malaria immune adults and has been shown to be under balancing (immune) selection in a Gambian parasite population, indicating potential as a malaria vaccine candidate. This study explores the population genetics of Pf38 in Papua New Guinea, to determine the extent and geographic distribution of diversity and to measure selective pressure along the length of the gene. METHODS: Using samples collected during community-based cross-sectional surveys in the Mugil and Wosera regions, the Pf38 genes of 59 P. falciparum isolates were amplified and sequenced. These sequences, along with previously sequenced Gambian and laboratory isolates, were then subjected to an array of population genetic analyses, examining polymorphisms, haplotype diversity and balancing selection. In addition to whole-gene analysis, the two 6-cys domains were considered separately, to investigate domain specific polymorphism and selection. RESULTS: Nineteen polymorphic sites were identified in the Pf 38 gene. Of these, 13 were found in the Gambia, 10 in Mugil and 8 in Wosera. Notably, the majority of common polymorphisms were confined to domain I. Although only moderate levels of nucleotide diversity were observed, the haplotype diversity was high in all populations, suggesting extensive recombination. Analyses of the full-length sequence provided only modest evidence for balancing selection. However, there was a strong contrast between domain I, which showed strong evidence for positive balancing selection, and domain II which was neutral. Analyses of the geographic distribution of Pf38 haplotypes showed that four haplotypes accounted for the majority of sequences found world-wide, but there were many more haplotypes unique to the African than the PNG populations. CONCLUSION: This study confirmed previous findings that Pf38 is a polymorphic gene under balancing selection. However, analysing polymorphism and selection across the length of the gene painted a considerably different picture. Domain I is highly polymorphic and the target of significant balancing selection. In contrast, domain II is relatively conserved and does not show evidence of immune selective pressure. The findings have implications for future population genetic studies on vaccine candidates, showing that the biological context must also be considered as a framework for analysis.