The experimental material comprised of 27 advance breeding lines and six varieties including ‘Surajmukhi’ as standard in randomized complete block design with three replications during summer- rainy season 2017. Genetic diversity studies grouped 33 chilli genotypes into six clusters. Maximum genotypes were placed in cluster I (16 genotypes) followed by cluster II (7 genotypes). Highest intra-cluster distance was observed for cluster IV followed by cluster II while maximum inter-cluster distance was observed between cluster V and VI followed by IV and V. Cluster V was observed to be the most important with maximum cluster means for most of the valuable traits. Total red ripe fruits per plant contributed maximum towards total genetic divergence followed by oleoresin content and marketable red ripe fruits per plant. Based on genetic divergence studies, best performing genotypes from cluster V, I, II, VI and III offer promise for their direct use as varieties and as potential parents in future breeding programmes to isolate transgressive segregants.