The present study was conducted to investigate the relationship between parents molecular marker diversity and hybrid performance in interspecific hybrids of cotton to evaluate the hybrid performance and heterosis using molecular markers.Twenty eight F4 lines of (Gossypium barbadense L.) were crossed with the four common diverse testers (Gossypium hirsutum L.) viz., DH 98-27 (T1), ZCH8 (T2), 178-24 (T3) and DH 18-31 (T4) to produce 112 F 1 interspecific hybrids during 2010.These 112 F 1 hybrids, their F5 parents lines with 4 testers and ruling commercial check (MRC6918 and DCH32) were evaluated for yield and fibre quality traits and sown during kharif 2011 at University of Agricultural Sciences, Dharwad, India.Genetic distances (GD) among the parents were calculated from 40 microsatellite marker data, and their correlation with hybrid performance and heterosis were analysed.The dendrogram constructed from the pooled data revealed three distinct clusters.One cluster involved testers and in another cluster all other lines were placed which are already having proven record in giving good hybrids.The similarity coefficients involved in the line x tester study ranged from 57% to 96 %, with an average of 81%.Among the parental lines, the lines [DB 533 x DB 534 F3 IPS 8] and [DB 533 x DB 534 F3 IPS 1] showed highest (96%) similarity coefficient value.While, the lines [(DB 531 x DB 534) DB 533 IPS 25] and [DB 533 x DB 534 F3 IPS 16] exhibited lowest (57%) similarity coefficient value.Genetic distance (GD) ranged from 0.041 to 0.429, with an average of 0.183.The result implied that each cluster dendrogram substantially reflected its own genetic relationship among parents.The correlation between (number of bolls per plant, mean boll weight, seed index, fibre strength, fibre uniformity ratio and fibre elongation) and genetic distance (GD) were non significant.Highly significant positive correlation were found between genetic distance (GD) and ginning outturn for F1 performance (0.277) and heterosis over MRC6918 and DCH32 (0.279), between genetic distance (GD) seed cotton yield for F1performance (0.359) and heterosis over MRC6918 (0.336) and over DCH32 (0.362) and between genetic distance (GD) and fibre micronaire value for mid parent heterosis (0.266).In conclusion, the relationship between SSR marker heterozygosity and hybrid performance can be used to predict fibre micronaire value, ginning outturn and seed cotton yield during interspecific hybrid cotton breeding.