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The extent of variance and heritability of traits influence the response to selection in crop breeding programs. The objective of this study was to determine variance components and heritability in tepary bean (Phaseolus acutifoliusA.Gray) populations to identify promising genotypes for strategic breeding or direct production. Fifty genetically diverse tepary bean genotypes were evaluated under two contrasting environments using a 5 × 10 alpha lattice design with two replications. Results showed significant (p≤ 0.05) differences among genotypes (G), environment (E) and G × E interaction for most of the studied traits. Phenotypic coefficient of variation values were higher than genotypic coefficient of variation for the studied traits, indicating greater contribution of genetic and environmental components influencing phenotypic variation. High broad-sense heritability and genetic advance were observed for grain yield (GY) and harvest index (HI), indicating better selection response for these traits in the population. Path coefficient analysis indicated that direct selection for HI could increase genetic gains for GY in tepary bean. Genotypes G40020, G40023, G40084, G40135, G40139, G40140, G40144A, G40145, G40157, G40159, G40173A, G40237 and G40284 exhibited better yield and yield components and were selected for breeding or population development in tepary bean.