A half diallel set of crosses among seven wheat parents (Triticum aestivum L.) was conducted and evaluated in the F2-generation under drought stress and normal irrigation conditions. The reduction % caused by drought stress in the F2-populations was low for days to heading (DH) (2.55%) and harvest index ( HI) (1.05%), moderate for plant height (6.12%), spike length (8.89%) and 100 GW (6.64%), and high (15.53%) for number of spikes/plant (NS/P) and grain yield/plant (GY/P) (18.52%). Four promising F2-populations were obtained; "Om 2 x Sids 13" gave the highest GY/P under both of drought and normal irrigation environments (18.03 and 22.0 g), "Om3 x Sids 13" gave good yield under drought stress (16.13 g) and was responsive to good environment (normal irrigation) (20.33 g), "Om 2 x Om 3" and "Om 2 x Sids 4" gave good yield under drought stress and were responsive to good environment. The graphical analysis of Wr and Vr indicated that, the distribution of the parents around the regression line was not consistent for drought stress and normal irrigation, for plant height, NS/P and HI, and consistent for the other traits. The average degree of dominance was partial for all traits except for HI and 100 GW under drought stress, which showed complete dominance. The results indicated that both additive and dominance effects of genes were involved in the inheritance of all traits. The dominance variance "H1" was larger than the additive one "D" under both environments and "H1" increased under drought stress. Non-allelic gene interactions (epistasis) were involved in the inheritance of all traits except days to heading and plant height under normal irrigation. Earliness, NS/P and 100GW showed positive significant correlations with GY/P, therefore, these traits should be considered when selection practiced for GY/P in the promising populations of these materials either under drought stress or normal irrigation. These results suggest that pedigree and recurrent selection methods could be effective to improve new wheat lines from the above mentioned promising populations under both environments.