The development of mutant populations, followed by their characterization, offers a significant opportunity to isolate genotypes and genes with desired traits of interest. This paper assessed the agronomic performance, genetic variability, and yield-related characteristics of 22 M3 generation mutants (gamma ray-irradiated) of rice derived from a promising local rice genotype (Fatema dhan). The seeds of the selected mutants, the original parent, and three cultivars were grown in a randomized complete block design at the research farm of the Department of Genetics and Plant Breeding, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh. Few mutants exhibited superior quantitative phenotypic traits compared with parental genotypes and check varieties. Mutant lines 1 and 83 required minimum days to reach maturity, and mutant lines 9, 17, and 80 exhibited significantly higher yield per plant than the parent and check varieties. Heritability analysis and genetic parameters revealed that genetic components mostly controlled all observed traits, with a minor influence on the environment. The higher phenotypic and genotypic coefficient of variation, heritability, and genetic gain confirmed possible rice yield improvement through phenotypic selection. The traits, including days to first flowering and maturity, plant height, and panicle length, showed a significant positive correlation with yield. The principal component analysis revealed that the first two components explained 69% of the total variation between genotypes. Thus, the promising mutant lines (1, 9, 17, 80, and 83) isolated in this study can serve for the development of high-yielding and early-maturing rice varieties.