Salix psammophila (desert willow) is a shrub endemic to the Kubuqi Desert and the Mu Us Desert, China, that plays an important role in maintaining local ecosystems and can be used as a biomass feedstock for biofuels and bioenergy. However, the lack of information on phenotypic traits and molecular markers for this species limits the study of genetic diversity and population structure. In this study, nine phenotypic traits were analyzed to assess the morphological diversity and variation. The mean coefficient of variation of 17 populations ranged from 18.35% (branch angle (BA)) to 38.52% (leaf area (LA)). Unweighted pair-group method with arithmetic mean analysis of nine phenotypic traits of S. psammophila showed the same results, with the 17 populations clustering into five groups. We selected 491 genets of the 17 populations to analyze genetic diversity and population structure based on simple sequence repeat (SSR) markers. Analysis of molecular variance (AMOVA) revealed that most of the genetic variance (95%) was within populations, whereas only a small portion (5%) was among populations. Moreover, using the animal model with SSR-based relatedness estimated of S. psammophila, we found relatively moderate heritability values for phenotypic traits, suggesting that most of trait variation were caused by environmental or developmental variation. Principal coordinate and phylogenetic analyses based on SSR data revealed that populations P1, P2, P9, P16, and P17 were separated from the others. The results showed that the marginal populations located in the northeastern and southwestern had lower genetic diversity, which may be related to the direction of wind. These results provide a theoretical basis for germplasm management and genetic improvement of desert willow.