This experiment was conducted to investigate the genetic and morphological diversity of 28 genotypes of wheat (Triticum aestivum) under water stress condition in 1391. Genotypes were studied in two water environments (non- drought and drought) in a complete block design with three replications. Under both normal and water stress conditions high genetic variation was observed among genotypes for most studied traits with the exception of leaf relative water content and leaf chlorophyll content. Genotype by environment interaction was significant for most traits indicating different reaction of genotypes toward moisture condition. Water stress caused a reduction in all traits except the 100 seed weight and proline content. Most reduction was observed for number of grains per spike (34.69%), yield (31.59%) and number of spikes per square meter (25.14%), respectively. In water stress condition, genotypes 21, 24 and 27 had the highest 100 seed weight and seed yield. Under water stress, genotypes 6, 9 and 19 and genotype 9, 22 and 28 were identified the most favorable genotypes in relation to 100 seed weight and yield, respectively. The correlation of traits was greatly reduced in water stress condition. The highest correlation was observed between the number of seed and seed yield (r= 0.653) and between the total spike weight and seed yield (r= 0.664) in non-stress and stress conditions, respectively. The results of stepwise regression showed that under non stress condition the 100 -grain weight, total spike weight, number of spikes per square meter, number of grains per spike and spike length justified 98 percent of seed yield variation. Under water stress condition the seed per spike, spike weight and leaf length justified 97 percent of seed yield variation. The results of cluster analysis classified the genotypes in three groups for water stress condition and two groups for no water stress situation. The cut point was verified based on the results of discriminate analysis. The results of the correlation between the indices of drought tolerance and yield under stress and non-stress showed that STI, MP and GMP indices are suitable for selection of high yielding genotypes in both conditions. The results of bi-plot and principal components analysis for indices identified genotype numbers 22, 26, 19, 21, 10, 24, 27, 6, 8 and 28 as the best genotype in terms of high performance and low sensitivity to water stress. Cluster analysis based on the better (superior) indices separated the genotypes into two groups, that were fully in agreement with the results of Gabriel bi-plot and three-dimensional drawing. There were not any differences between tetraploid and hexaploid genotypes in terms of all traits