Complete F1 and F2 diallel crosses were used to investigate the inheritance of yellow rust resistance among eight bread wheat lines, developed by CIMMYT for the East African Highlands, which showed a wide response to this disease. Both diallel sets were grown at a site with a high incidence of yellow rust, although for one season, during which the F1 diallel was grown, disease incidence was unusually low. Analyses disclosed the presence of additive, dominance and epistatic effects among those genes controlling rust resistance, with the former being the most important. At normal disease levels, excluding two arrays having resistant common parents removed non-allelic interactions from the F1 diallels. For all F2 diallels, and the remaining F1 diallel, omitting two arrays based on susceptible parents removed these interactions. Local selection of material from a broadly based germplasm appears to be a feasible method of developing adapted cultivars resistant to endemic diseases.