Genetic diversity is important for crop improvement. An experiment was conducted during 2011 to study genetic variability, character association, and genetic diversity among 27 soybean mutants and four mother genotypes. Analysis of variance revealed significant differences among the mutants and mothers for nine morphological traits. Eighteen mutants performed superiorly to their mothers in respect to seed yield and some morphological traits including yield attributes. Narrow differences between phenotypic and genotypic coefficients of variation (PCV and GCV) for most of the characters revealed less environmental influence on their expression. High values of heritability and genetic advance with high GCV for branch number, plant height, pod number, and seed weight can be considered as favorable attributes for soybean improvement through phenotypic selection and high expected genetic gain can be achieved. Pod and seed number and maturity period appeared to be the first order traits for higher yield and priority should be given in selection due to their strong associations and high magnitudes of direct effects on yield. Cluster analysis grouped 31 genotypes into five groups at the coefficient value of 235. The mutants/genotypes from cluster I and cluster II could be used for hybridization program with the mutants of clusters IV and V in order to develop high yielding mutant-derived soybean varieties for further improvement.