The purpose of this study was to investigate early generation selection methods for the identification of peanut (Arachis hypogaea L.) crosses with combined high yield and disease resistance. Eleven crosses were chosen in the S₁ on the basis of yield and disease reaction. The S₂ was evaluated under natural disease infection for pod yield and leafspot resistance, causal organisms Cercospora arachidicola Hori and Cercosporidium personatum (Berk. and Curt.) Deighton. Resistance was measured by leaf necrotic area and defoliation. Narrow sense heritabilities for all the traits were estimated by sib analysis and regression of S₂ plant performance on S₁ plant performance. Genetic correlations among traits and the relative efficiency of indirect selection for all the traits were also computed. The results suggest that selection among crosses for all the traits would be advantageous in the S₁ (h²_f = 67 to 79%) as compared to individual plant selection (h₂ = 16 to 26%) or within family selection (h²_w = 3 to 5%). Selection of genotypes within crosses would be the poorest strategy in early generations. Negative genetic correlations were noted between yield and leafspot severity. The expected progress in increasing resistance of peanut genotypes through selection for yield (30 to 40% of the response from direct selection for resistance) indicated that selection for yield under disease pressure may be advantageous for developing high yielding, leafspot tolerant genotypes.