Madhuca latifolia Macb. commonly known as Indian butter tree, is an open-pollinated plant. Improvement in seed and oil yields depends on the progress in the desired characters in the base material and the genetic variability available in the collected germplasm. We evaluated 23 genotypes of M. latifolia to understand genetic variability, character association and divergence in seed traits and oil content for use in breeding programs. Variation was recorded in seed length (27.3–38.6 mm), seed breadth (15.6–19.1 mm), two dimensional (2D) surface area (328.3–495.4 mm2), 100 seed weight (216.8–285.3 g), acid value (13.4–25.8 mg KOH/g), iodine number (62.4–78.6) and oil content (37.8–51.0 %). High estimates of genotypic coefficient of variation, broad sense heritability and genetic gain were observed for seed oil content. Variability studies for seed traits revealed that genotype CPT-16 had the highest 100-seed weight (281.5 g) and oil content (51 %). Highly significant genotypic and phenotypic correlations were observed. The 100-seed weight was positively and significantly correlated with oil content at both phenotypic (r = 0.57) and genotypic (r = 0.60) levels. Cluster analysis of the scores of the first three principle components (80.83 %) resulted in four clusters, consisting of 4, 7, 3 and 9 genotypes in the first, second, third and fourth clusters, respectively. Cluster 3 was distinguished from others based on significantly higher means for most seed traits except seed breadth, acid value, iodine number and oil content. Cluster 1 appeared more divergent as it had significantly higher means for acid value and iodine number. A comparative assessment of means of the four clusters for 100-seed weight and oil content suggested that cluster 3 would be useful for higher 100-seed weight and oil content. Hence these genotypes, CPT-3, CPT-6 and CPT-15 in cluster 3 can be used for direct selection and utilization in breeding programs.