In this paper, Shannon–Weaver diversity indices were employed to examine the phenotypic diversity in 271 Ethiopian tetraploid wheat accessions in relation to characters, regions of origin and altitude. Moreover, review of genetic diversity studies in Ethiopian tetraploid wheat was made to explore breeding opportunities. The diversity index varied widely across regions. Among the four altitudinal classes, the highest (0.72) and lowest (0.61) mean diversity indices were observed in altitude classes II and IV, respectively. The diversity index (H′) showed that most traits are polymorphic. The partitioning of the total phenotypic diversity into within- and among-region diversity indicated that 71% of the total variation was attributed to the within-region diversity. Principal component analysis was computed to examine the regional and altitudinal patterns of variation. On regional bases, the first four axes, whose eigenvalues are greater than 1, explained about 82% of the observed phenotypic diversity in the 271 tetraploid wheat accessions. On altitudinal bases, however, only the first two principal components explained 89.7% of the total variation. In general, phenotypic diversity showed considerable differences for each trait in different geographical regions and altitudinal classes which could be utilized in wheat improvement programmes. Breeding opportunities and strategies are suggested.