Barley is the fifth most important food crop in Ethiopia. The genetic relationship and population structure studies of barley are limited to gene bank collections. Therefore, this study fills a gap by investigating the selection, consumption, economic value, genetic diversity, and population structure of farm-collected barley from the Gumer district of the Gurage Zone, which has received little attention. The information on the use of barley in the study area was collected using semi-structured interviews and questionnaires. 124 households of 11 kebeles, the smallest community unit, were interviewed. Barley landraces collected were compared with those collected from Japan, the United States (USA), and other Ethiopian locations. Illumina iSelect (50K genotyping platform) was used to identify single nucleotide polymorphisms (SNP) (20,367). Thirty landraces were found in Gumer. Burdaenadenber had the highest on-farm Shannon index estimate (2.0), followed by Aselecha (1.97) and Enjefo (1.95). Aselecha and Fetazer had the highest (44%) and the lowest (29%) richness values, respectively. High and low Simpson index values were found in Aselecha (84%) and Wulbaragenateretero (79%), respectively. The neighbor-joining tree revealed that Gumer landraces formed a separate subcluster with a common ancestral node; a sister subcluster contained barley landraces from Japan. According to the population structure analysis, barley landraces from Gumer differed from Japan and the United States. The principal component analysis revealed that US barley was the most distant group from Gumer barley. The markers’ allele frequencies ranged from 0.10 to 0.50, with an average value of 0.28. The mean values of Nei’s gene diversity (0.38) and the polymorphic information content (0.30) indicated the presence of high genetic diversity in the samples. The clustering of accessions was not based on geographic origin. Significant genetic diversity calls for additional research and analysis of local barley diversity because the selection and use of barley in Ethiopia would have been affected by the preference of ethnic groups.