Eight parents and their 28 cross combinations (crossed in an 8 × 8 diallel fashion without reciprocals) of groundnut were evaluated in randomized block design with three replications for variability, heritability and genetic advance during kharif, 2009. Observations on sixteen characters were recorded. Analysis of variance revealed highly significant differences among the genotypes for all the characters studied. High GCV accompanied by high heritability and high GAM were obtained for number of secondary branches per plant, percentage of leaves affected by foliar diseases per plant and number of immature pods per plant indicating predominant role of additive gene action and amenability for phenotypic selection in early generations. Rust severity, number of mature pods per plant and pod yield per plant recorded high GCV and moderate heritability and GAM. Moderate GCV, moderate to low heritability and GAM were registered for number of primary branches per plant, kernel weight per plant, shelling out-turn, late leaf spot and harvest index indicating that additive and non-additive gene actions have a role in their inheritance and phenotypic selection would be effective to some extent. Days to 50 per cent flowering, days to maturity, plant height at harvest and sound mature kernel percentage recorded low GCV, high to moderate heritability and low GAM indicating larger role of non-additive gene action and selection would be effective in later segregating generations.