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Understanding the genetic mechanisms underlying milk production traits contribute to improving the production potential of dairy animals. Squalene epoxidase (SQLE) is one of the rate-limiting enzymes for cholesterol biosynthesis and was highly expressed in the buffalo mammary. The objectives of the present study were to detect the polymorphisms within SQLE in buffalo, the genetic effects of these mutations on milk production traits, and to understand the gene regulatory effects on buffalo mammary epithelial cells (BuMECs). A total of five SNPs were identified by sequencing, g.18858G > A loci were significantly associated with fat yield, and g.22834C > T loci were significantly associated with peak milk yield, milk yield, fat yield, and protein yield. Notably, linkage disequilibrium analysis indicated that 2 SNPs (g.18858G > A and g.22834C > T) formed one haplotype block, which was found to be significantly associated with milk fat yield, fat percentage, and protein yield. Furthermore, expression of SQLE was measured in different tissues of buffalo and was found to be higher in the mammary. Knockdown of SQLE gene expression significantly affected the growth of BuMECs, including proliferation, cell cycle, and apoptosis, and significantly downregulated the expression of related genes MYC, PCNA, and P21. In addition, knockdown of the SQLE gene significantly reduces triglyceride concentrations and the signal intensity of oil red O staining. In addition, silencing of SQLE was also found to regulate the synthesis and secretion of β-casein and κ-casein negatively. Furthermore, SQLE knockdown is accompanied by the downregulation of critical genes (RPS6KB1, JAK2, eIF4E, and SREBP1) related to milk fat and protein synthesis. The current study showed the potential of the SQLE gene as a candidate for buffalo milk production traits. It provides a new understanding of the physiological mechanisms underlying buffalo milk production regulation. [ABSTRACT FROM AUTHOR]