Genetic diversity and variation of traits are the basic tools involved in the natural evaluation and development of sustainable crop varieties under various environmental conditions. The present study was conducted during 2018 and 2019 at Sinana Agricultural Research Center (on-station) and Goba (on-farm), South-east Ethiopia to assess the genetic variability, direct and indirect contributions of some metric characters on grain yield of 585 barley landraces along with 10 cultivars under augmented complete block design. Data were recorded on twelve quantitative characters and mean, range, components of variation, broad sense heritability, genotypic coefficient of variation (GCV), phenotypic coefficient of variation (PCV) and genetic advance were estimated for yield and yield associated characters. Results revealed significant variation for all characters among the tested barley accessions. Heritability with high genetic advance was observed for plant height, number of fertile tillers/plant, spike length, number of seeds/spike, and 1000seed weight, while moderately high heritability coupled with high genetic advance was noticed for grain yield/plant. From correlation analysis, grain yield/plant was found to be significantly and positively correlated with days to 50% heading, days to 95% physiological maturity, number of fertile tillers, seeds per spike, plant height, 1000-seed weight and biological yield. Analysis of path coefficient indicated number of tillers/plant, biological yield, 1000-seed weight and number of seeds/spike had higher positive direct effect on grain yield/plant. Those quantitative characters with significant and positive direct effect on grain yield/plant can be considered as an effective selection criterion for developing high yielding barley varieties in the future crop improvement program.