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Abstract Background Aspergillus species cause aflatoxin contamination in groundnut kernels, being a health threat in agricultural products and leading to commodity rejection by domestic and international markets. Presence of Aspergillus flavus and A. parasiticus colonizing groundnut in eastern Ethiopia, as well as presence of aflatoxins have been reported, though in this region, no genetic studies have been done of these species in relation to their aflatoxin production. Results In this study, 145 Aspergillus isolates obtained from groundnut kernels in eastern Ethiopia were genetically fingerprinted using 23 Insertion/Deletion (InDel) markers within the aflatoxin-biosynthesis gene cluster (ABC), identifying 133 ABC genotypes. Eighty-four isolates were analyzed by Ultra-Performance Liquid Chromatography (UPLC) for in vitro aflatoxin production. Analysis of genetic distances based on the approximately 85 kb-ABC by Neighbor Joining (NJ), 3D-Principal Coordinate Analysis (3D-PCoA), and Structure software, clustered the isolates into three main groups as a gradient in their aflatoxin production. Group I, contained 98% A. flavus, including L- and non-producers of sclerotia (NPS), producers of B1 and B2 aflatoxins, and most of them collected from the lowland-dry Babile area. Group II was a genetic admixture population of A. flavus (NPS) and A. flavus S morphotype, both low producers of aflatoxins. Group III was primarily represented by A. parasiticus and A. flavus S morphotype isolates both producers of B1, B2 and G1, G2 aflatoxins, and originated from the regions of Darolabu and Gursum. The highest in vitro producer of aflatoxin B1 was A. flavus NPS N1436 (77.98 μg/mL), and the highest producer of aflatoxin G1 was A. parasiticus N1348 (50.33 μg/mL), these isolates were from Gursum and Darolabu, respectively. Conclusions To the best of our knowledge, this is the first study that combined the use of InDel fingerprinting of the ABC and corresponding aflatoxin production capability to describe the genetic diversity of Aspergillus isolates from groundnut in eastern Ethiopia. Three InDel markers, AFLC04, AFLC08 and AFLC19, accounted for the main assignment of individuals to the three Groups; their loci corresponded to aflC (pksA), hypC, and aflW (moxY) genes, respectively. Despite InDels within the ABC being often associated to loss of aflatoxin production, the vast InDel polymorphism observed in the Aspergillus isolates did not completely impaired their aflatoxin production in vitro.