Analysis of a six parent diallel cross involving high and low nitrogen fixing peanut (Arachis hypogaea L.) genotypes revealed the predominant nature of non-additive genetic variance for nitrogenase activity and other traits. Germplasm line, NC Ac 2821 had the highest general combining ability for nitrogenase activity, total nitrogen, leaf area, and top weight, and therefore, it should be a good parent for use in breeding programs. Nitrogenase activity was significantly and positively correlated with nodule number, nodule mass, total nitrogen, top weight, and root weight. This evidence suggests the possibility of breeding for increased nitrogen fixation and thus yield in peanut.