Metarhizium rileyi is an entomopathogenic fungus that naturally infects the larvae of Spodoptera frugiperda, and has biocontrol potential. To explore more natural entomopathogenic fungi resources, a total of 31 strains were isolated from 13 prefectures in Yunnan Province. All the strains were identified using morphology and molecular biology. The genetic diversity of the 31 isolates of M. rileyi was analyzed using inter-simple sequence repeat (ISSR) techniques. Seven primers with good polymorphism were selected, and fifty-four distinct amplification sites were obtained by polymerase chain reaction amplification. Among them, 50 were polymorphic sites, and the percentage of polymorphic sites was 94.44%. The thirty-one strains were divided into eight subpopulations according to the regions. The Nei’s gene diversity was 0.2945, and the Shannon information index was 0.4574, indicating that M. rileyi had rich genetic diversity. The average total genetic diversity of the subpopulations in the different regions was 0.2962, the gene diversity within the populations was 0.1931, the genetic differentiation coefficient was 0.3482 (>0.25), and the gene flow was 0.9360 (<1). The individual cluster analysis showed that there was no obvious correlation between the genetic diversity of the strains and their geographical origin, which also indicated that the virulence of the strains was not related to their phylogeny. Thus, the genetic distance of the different populations of M. rileyi in Yunnan Province was not related to the geographical distance. The virulence of those 32 strains against the 3rd-instar larvae of S. frugiperda were varied with the differences in geographical locations. On the 10th day of inoculation, seventeen strains had an insect mortality rate of 70.0%, and seven strains had an insect mortality rate of 100%. The half-lethal times of the M. rileyi SZCY201010, XSBN200920, and MDXZ200803 strains against the S. frugiperda larvae were less than 4 d. Thus, they have the potential to be developed into fungal insecticidal agents.