The aim of this investigation was to study combining ability, gene action and heterobeltiosis for some traits and determination of aflatoxin contamination in peanut. A diallel cross, without reciprocals, among five parents was done in 2013. Data revealed that the mean squares of genotypes, parents and crosses were significant for all studied traits in both of F₁ and F₂ generations. The analysis of variance for combining ability showed that mean squares due to general (GCA) and specific (SCA) combining ability were generally significant for all studied traits reflecting the importance of both additive and non- additive gene effects in the inheritance of these traits. The lines A1and 623 were good combiners for 100-pod weight, shelling percentage and pod yield feddan^{-1 in the two seasons (one ardab=75kg and one feddan=4200m2}). Genotypes 10A and 2A were good combiners for number of pods plant^-1, pod weight plant^-1, number of seeds plant^-1 and seed weight plant^{-1 in the second season. Regression line intersects the Wr axis below the origin in shelling percentage in F}₁ and F₂ generations and pod yield feddan^{-1 in F}₂ generation, reflecting over- dominance. On the other hand, pod yield feddan^-1 was controlled by partial dominance. Among these gene action partial dominance could easily be exploited through conventional breeding. Positive or negative heterosis over the better parent, i.e. heterobeltiosis was detected for all studied traits. Determination of aflatoxin contamination under normal storage conditions showed that the two crosses (P₃X P₄ and P₃X P₅) had total aflatoxins of 10.6, 20.1ppb, respectively. Meanwhile, total aflatoxins were not detected in parents and other F₂ crosses.