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Animal genetic resources are crucial for ensuring global food security. However, in recent years, a noticeable decline in the genetic diversity of livestock has occurred worldwide. This decline is pronounced in developing countries, where the management of these resources is insufficient. In the current study, we performed whole genome sequencing for 20 Wuxue (WX) and five Guizhou White (GW) goats. Additionally, we utilized the published genomes of 131 samples representing five different goat breeds from various regions in China. We investigated and compared the genetic diversity and selection signatures of WX goats. Whole genome sequencing analysis of the WX and GW populations yielded 120 425 063 SNPs, which resided primarily in intergenic and intron regions. Population genetic structure revealed that WX exhibited genetic resemblance to GW, Chengdu Brown, and Jintang Black and significant differentiation from the other goat breeds. In addition, three methods (nucleotide diversity, linkage disequilibrium decay, and runs of homozygosity) showed moderate genetic diversity in WX goats. We used nucleotide diversity and composite likelihood ratio methods to identify within‐breed signatures of positive selection in WX goats. A total of 369 genes were identified using both detection methods, including genes related to reproduction (GRID2, ZNF276, TCF25, and SPIRE2), growth (HMGA2 and GJA3), and immunity (IRF3 and SRSF3). Overall, this study explored the adaptability of WX goats, shedding light on their genetic richness and potential to thrive in challenges posed by climatic changes and diseases. Further investigations are warranted to harness these insights to enhance more efficient and sustainable goat breeding initiatives. [ABSTRACT FROM AUTHOR]