The mutagenic effects of different concentrations of sodium azide (0.01 – 0.05%) on groundnut (Arachis hypogaea L. cv SS1145B and RMP 91) were investigated. The characters studied include; plant height, number of branches per plant, pods/plant, seeds/pod, seeds/plant and 100 seed weight in the M1 and M2 generations. Both negative and positive shifts in mean values were recorded as a result of the chemical treatment. The most effective dosage for inducing mutation/morphological aberration was established at 0.03%. Increases in genetic parameters of variation, heritability and genetic gain under the chemical treatment indicate the possibility of evolving higher yield variants through proper crop selection. Thus, economic traits like pods/plant, seeds/plant with high heritability and genetic gain values in the M3 generation offer good scope for selection and improvement.