Barley (Hordeum vulgare L.) has great adaptability to a wide range of environments. To determine genetic diversity in barley landraces, a total of 43 landrace populations were randomly sampled from the farmers' field on plant basis and characterized for eight qualitative traits; namely, kernel row number, spike density, lemma awn barb, glume color, lemma type, length of rachila hair, kernel covering and lemma/kernel color. Morphological diversity was determined by the Shannon-Weaver index (H'). Overall barley landrace populations showed an average diversity index of 0.59, implying large diversity for the populations. Selection for adaptation to different altitude classes appears to be the main factor that has determined the observed variation, along with population-size effects. The result showed that barley landraces from Gamo highlands, Ethiopia are constituted by highly variable landraces that have large within-population diversity. These landraces are also shown to be locally adapted, with the major driving force that has shaped their population structure being consistent with selection for adaptation along an altitudinal gradient. Overall, this study highlights the potential of such landraces as a source of useful genes that can be exploited in crop improvement programmes.