A study on the morphological and molecular characterization of rice (Oryza sativa L.) varietiesrnand lines of Ethiopia was carried out in 2009/10 cropping season. A total of 18 released and eliternrice varieties of Ethiopia were used. Inter simple sequence repeats (ISSR) was used as arnmolecular marker to assess genetic diversity within and among varieties using five ISSR primersrn(810, 824, 834, 873 and 878). A total of 75 clear and reproducible bands were amplified, out ofrnwhich 62(82.67%) were observed to be polymorphic. The number of polymorphic loci rangedrnfrom 8 for primer-873 to 16 for primer-810. The lowland rice genotypes showed the highestrnpolymorphism (74.67%), followed by upland (61.33%) and NERICA varieties (57.33%). In thernsame fashion, genetic diversity analysis indicated that lowland rice genotypes showed higherrndiversity (0.27) than both upland (0.25) and NERICA varieties (0.23). The over all geneticrndiversity of Ethiopian rice was found to be 0.29. The un-weighted pair group method usingrnarithmetic mean (UPGMA) and neighbor joining trees clustered the genotypes in to theirrnrespective ecosystem Lack of purity in IREM-194, HO-04 and AD-12 was prevalent from thernconstructed trees and field observation. The principal coordinate analysis (PCO) also recoveredrnthe UPGMA and neighbor joining tree groups. Analysis of molecular variance (AMOVA)rnrevealed that higher percentage of variation was attributed to variation within individualsrn(88.67) and the variation among groups was lower (11.33).In the morphological study, whichrnwas carried out in a randomized complete block design (RCBD) with three replications, 23rnqualitative and 13 quantitative traits were evaluated based on the standard procedures given byrnInternational Rice Research Institute and Bioversity International. The result of all diversityrnparameters indicated that there exists a clear difference among the genotypes for all the traitsrnconsidered. Analysis of variance (ANOVA) and Duncanâ€™s multiple range test (DMRT) revealedrnthe variability of the genotypes for each of the 13 quantitative traits. Phenotypic coefficient ofrnvariation (PCV) varied from 5.38% for number of days to heading to 20.49% for leaf length.rnSimilarly, genotypic coefficient of variation (GCV) ranged from 5.36% for number of days tornheading to 19.47% for leaf length. Higher heritability values were observed for all the 13rnquantitative traits, out of which nine traits showed heritability percentage more than 90 %. Itrnranged from 98.98% for number of days to heading to 55.13% for grain yield. Correlation ofrntraits showed that most of the traits were associated. Cluster analysis using morphological datarngrouped all the test materials in to two main clusters but failed to strictly cluster the genotypes inrnto their respective ecosystems. Principal component analysis (PCO) showed that the first threernprincipal components explained about 86.81 % of the total variation. Generally, the studyrnindicated the existence of narrower genetic diversity among the genotypes which calls for timelyrnaction to widen the genetic diversity of Ethiopian rice so as to combat the devastating outcome ofrnhaving narrower genetic diversity in cultivated crops.rnKey words: Rice (Oryza Sativa L.), ISSR, genetic diversity, trait association