Bread wheat cross Sids 12 x Misr 3 was studied in F₁, F₂, F₃ and F₄ generations to develop promising genotypes for improvement of grain yield, rust resistance and grain quality. The two parents differed significantly for most characters under study showing sufficient variability in F₂ and F₃ generations to calculate the genetic parameters. The genetic variances indicated important role coupled with moderate to high broad sense heritability for most studied characters in F₂ and F₃ generations. Both grain filling rate and number of spikes m^-2 were the most important characters in selection for high grain yield in F₃ generation. Rust resistance in the two parents was controlled by one dominant gene for yellow rust, two dominant genes for leaf rust and two complementary dominant genes for stem rust. Thirty-seven families out of 100 families were superior for grain yield, but the susceptibility of the three rusts eliminated 17 families and only 20 families were resistant or moderately resistant to the three rusts. Five out of the selected 20 families had good grain quality characteristics. In F₄ generation, five wheat plants characterized by an adequate resistance to the three rusts and good agronomic characters were selected for further evaluation as F₅ lines.