Genetic divergence and variability was assessed among 33 elite germplasm lines which were evaluated in RBD at Regional Agricultural Research Station, Warangal with an objective to classify and understand the nature and magnitude of genetic diversity and variability with regard to grain yield, yield components and quality traits using Mahalanobis D2 statistics. Genotypes were grouped into eight clusters and cluster I was the largest comprised of 23 genotypes followed by cluster II which consists of 4 genotypes and rest of the clusters from cluster III to cluster VIII contain one genotype each. The maximum cluster distance was found between cluster II and cluster IV (2178.98) followed by cluster III and cluster VIII (2160.16). The minimum inter cluster distance was observed between cluster I and cluster III (540.96). The intra cluster distance was maximum for cluster II (354.1) indicating existence of variability within the cluster. A perusal of results on cluster means revealed that cluster VIII recorded highest cluster mean for yield/plant, panicle length, test weight, plant height, volume expansion ratio, kernel length after cooking, length/breadth ratio, kernel length and kernel width, The most important trait causing maximum divergence was plant height (31.8) which ranked 168 times first followed by alkali spreading value, days to 50% flowering and test weight were responsible for differentiating the genotypes studied. Phenotypic coefficient of variation (PCV) was slightly higher than genotypic coefficient of variation (GCV) for all the traits. Moderate GCV and PCV estimates were observed for filled seeds/panicle, test weight, alkali spreading value, volume expansion ratio, yield/plant, water uptake and head rice recovery. High heritability coupled with moderate genetic advance as percent of mean was observed for test weight (98.5:46.62), filled seeds/panicle (92.6:46.26), alkali spreading value (90.9:43.15), yield/plant (78;35.30), head rice recovery (78.9:27.46) and volume expansion ratio (69.1:37.3). In this study the genotypes WGL 1143, WGL 1150, WGL 1149, Tellahamsa in cluster II and WGL 1062 in cluster IV and WGL 915 in cluster VIII were widely divergent and crosses may be effected among the genotypes of the clusters to get more heterosis and subsequently better recombinants in segregating generations.