Despite the economic importance of sesame in Ethiopia, and the wide genetic base in our country, research gaps related to genetic diversity still limit the effectiveness of breeding programs. This study addresses this gap by assessing genetic diversity and its relationship with quantitative traits for 64 sesame genotypes (23 exotic and 41 local), including released varieties using an 8 × 8 simple lattice design at Assosa Agricultural Research Center, Western Ethiopia, during the 2021 main cropping season. Analysis of variance (ANOVA) revealed highly significant differences (
p
< 0.001) among genotypes for all traits, indicating substantial genetic variation. Except capsule length, all studied traits showed strong positive association with yield, and bacterial blight severity (BBS) was negatively associated with all traits. Cluster analysis grouped the 64 genotypes into four distinct clusters, confirming that genetic variation is not strictly linked to geographical origin, reflecting the influence of germplasm exchange and genetic mixing. Maximum intercluster distance observed between Cluster II and Cluster IV (
D
2
= 76.00), followed by Cluster I and Cluster II (
D
2
= 61.10) and Cluster I and IV (
D
2
= 60.43). It’s a greater potential for heterotic hybridization to improve yield and yield‐contributing traits. The first three principal components accounted for 71.8% of the total variation among genotypes; from total variation (71.8%) number of capsules per plant (CPP), plant height (PH), number of primary branches (PB), and bacterial blight disease severity has greater magnitudes for the first explained variance (52.59%). In biplot visualizations, Genotypes 32, 2, 7, 19, and 11 were positioned in the direction of yield‐contributing traits, and G46 and G38 were closely associated with oil‐related traits and suitability for oil yield improvement.