Information about combining ability and genetic diversity among maize inbred lines is fundamental in designing breeding strategies for improving grain yield. Twenty one F1 hybrids were generated by crossing seven yellow maize inbred lines in a half diallel mating scheme in 2013 season. The 21 F1 hybrids plus the two check hybrids (SC166 and SC173) were evaluated in a randomized complete block design with three replications during 2014 season, to estimate combining ability effects and identify type of gene action governing the inheritance of grain yield and other important agronomic traits. Results showed that both general (GCA) and specific (SCA) combining ability mean squares were highly significant for all the studied characters. The GCA/SCA ratio was more than unity for all the studied traits, except days to 50% silking, plant height and grain yield, indicating the preponderance of the additive gene effects in the inheritance of these traits. The inbred line P1 appeared to be the best general combiner for earliness, grain yield and its components. The crosses P1×P2, P3×P7, P4×P7, and P5×P6 had the best SCA effects for grain yield and most of its component traits. The cross P1×P2 significantly out-yielded the two check hybrids (SC166 and SC173). The genetic diversity among the seven yellow parental inbred lines was assessed using two types of molecular markers; Random Amplified Polymorphic DNA (RAPD) and Simple Sequence Repeats (SSR). Seven random primers were used in the RAPD reactions, resulting in the amplification of 82 bands with 95.12% polymorphism. While, eight pairs of SSR primers were used and resulted in 49 fragments with 100% polymorphism. Genetic similarity among all possible pairs of inbred lines varied from 0.12 to 0.69, with an average of 0.34, for RAPD markers, and from 0.01 to 0.56, with an average of 0.24, for SSR markers. The similarity matrices for RAPD and SSR data were not significantly correlated (r=0.34, p >0.05). Genetic distances based on RAPD and SSR markers were insignificantly correlated with F1 hybrids grain yield, the correlation values being (r =0.02 and 0.429 P>0.05), respectively. Therefore, the parental genetic distance could not be used to predict the grain yield of the F1 hybrids in this study.