This investigation was carried out at Sakha Agricultural Research Station, ARC, Egypt during the two growing seasons (2010/2011 and 2011/2012). Seven lines and three testers were used to develop barley hybrids for yield and its components under normal and water stress conditions. Through this study, general and specific combining ability, genetic parameters, heritability and genetic advance from selection were studied for plant height (cm), spike length (cm), no. of spikes/plant (spike), no. of grains/spike (grain), 100-grain weight (g), grain yield/plant (g) and drought susceptibility index. Data revealed that most of the variance due to the lines, testers and line x testers were highly significant for most studied traits. The estimates of GCA effect indicated that, parent L₆ considered as good combiners for no. of grains/spike, 100-grain weight and grain yield/plant under the two conditions and their combined, spike length and no. of spikes/plant under stress condition. Also, the parent L₂ for plant height and parent T₂ for 100-grain weight are considered as good combiner under the two conditions and their combined. For SCA estimates, results indicated that the crosses; 14 for plant height under normal condition, 10, 11 for spike length, 3, 17 for no. of spikes/plant under stress condition and cross 17 for grain yield /plant under the two conditions and their combined considered as the best crosses for these traits. Heritability values in broad sense values were found to be moderate to high in magnitude for most of the studied characters. On the other side, heritability values in narrow sense were found to be low to moderate in these traits. Finally, the top crosses no. 12 and 17 conceder as the best crosses for under study, so using it in breeding program for high yielding under normal water stress would be useful.