BackgroundThe Ethiopian southwest drainage has been designated a huge potential for fishery and aquaculture development. However, the genetic diversity of Nile tilapia along the main water bodies has yet to be uncovered. Therefore, this study used microsatellite markers to assess the genetic structure and diversity of Nile cichlid (Oreochromis niloticus) populations.MethodsOne hundred and sixty‐seven fish were collected from Alwero Dam, Baro River, Gilgel Gibe I Dam and Gojeb River southwest of Ethiopia. Genomic DNA was extracted from 40 tissue samples using a Qiagen DNA tissue extraction kit and genetic polymorphism was estimated using GenAlEx6.502 software.ResultsThe result showed that four loci were polymorphic and produced 3–6 alleles per locus, while the number of effective alleles (Ne) and the number of distinct alleles (Na) were 1.370 and 2.063, respectively. Observed heterozygosity (Ho) and expected heterozygosity (He) were expanded between 0.100.50 and 0.115–0.265, respectively. Baro River population revealed the highest mean expected heterozygosity of 0.265, whereas the lowest expected mean heterozygosity of 0.115 was from the Alwero Dam. The genetic differentiation between populations (FST) resulted in a moderate to a very high degree of divergence between the populations. The Alwero Dam and Gojeb River populations were the most divergent populations (FST = 0.524), unlike those from the Alwero Dam and Baro River. The genetic variation among individuals within populations was 69%, whereas 31% appeared among populations and no variation within individuals to the overall variance.ConclusionThis study confirmed the presence of significant genetic variations and differentiation among populations except between Gilgel Gibe I Dam and Gojeb River. This study highlights the genetic structure and differentiation amongst wild Nile tilapia (O. niloticus) populations in south‐western Ethiopia and paves the way for selective aquaculture breeding programs in the study area.