Abstract Twenty upland rice varieties released in Ethiopia from 1998 to 2016 were evaluated at Fogera National Rice Research and Training Center to estimate the amount of genetic divergence and gain made over time for grain yield and yield related traits. The varieties were laid out in a randomized complete block design with three replications in 2017 cropping season. Analysis of variance revealed significant differences among varieties for all traits. Genotypic coefficients of variation ranged from 6.44 (days to maturity) to 30.47% (yield per plant) and phenotypic coefficients of variation ranged 6.51 (days to maturity) to 30.67% (yield per plant). High genotypic and phenotypic coefficients of variation with low magnitude of differences between the two were observed for days to maturity, yield per plant and number of filled grains per panicle. Highly significant (P<0.01) and positive phenotypic and genotypic correlations were observed between grain yield with yield per plant, number of filled grains per panicle and biomass yield. The highest positive and significant genotypic direct effects on grain yield were exerted by plant height, harvest index, days to maturity and biomass yield, suggesting higher chance of improving yield of upland rice through indirect selection of these traits. The average annual rate of genetic gain of upland rice varieties was estimated 0.044 t ha-1(1.59 % year-1). A 1.59 % year-1 relative genetic gain was significantly different from zero for the period of 1998-2017 and improvement level has not attained plateau in Ethiopia. Thus, development of higher yielding varieties of upland rice should continue if past trends pretend the future. Generally, the research efforts made for the last two decades brought considerable improvement in genetic potential of upland rice varieties. However, this study was conducted for one season at one location and therefore repeating the trial may be needed for sound conclusion. Key Words: Association of traits, Genetic Divergence, Genetic Improvement, Oryza sativa, Yield Attributes.