Stachys lavandulifolia is one of the most important medicinal plants in pharmaceutical and sanitary industries with high distribution in Iran. There are limited study in respect to its genetic diversity and identification of high essential oil content genotypes. For this purpose, assessment of genetic variation was performed using morphological , anatomical and essential oil content . In this study 41 genotypes were collected from four regions including Fereidoonshahr, Damaneh, Shahrekurd and Semirom. The experiment was carried out in a split plot with randomized block design in three replicates in 93-94 and 94-95. Result of analysis of variance showed significant differences among the most of the studied anatomical and morphological traits. In anatomical traits, the correlation between length of upper chelorenchyma and width chollenchyma, width of lower chelorenchyma and diameter phloem of leaves was positivity significant. The essential oil content revealed the highest positive correlation with the number of secretory hair. The results of stepwise regression showed that the number of secretory hair, have high correlation with essential oil and can be used for indirect selection in breeding programs. The principle component analysis (PCA) of anatomical traits was also confirmed the result of clustering. The highest coefficient of variation of morphological traits and essential oil in both years was related to trait of essential oil. The highest broad sense heritability in the first year was related to trait of wet weight and the second year was attributed to trait of number of lateral branches. The result of mean comparison showed that Damaneh genotypes for the most of the traits had the highest values. In the first year, the correlation between essential oil and days to flowering was significantly positive and in the second year essential oil content with length to width ratio leaves had significant negative correlation. In general, morphological traits did have not positive and significant correlation with essential oil content. The result of cluster analysis, based on morphological and essential oil content in both years separated the genotypes mostly based on their geographical origins. Keywords : Stachys , Genetic variation, Anatomical traits, Morphological traits, essential oil yield