Groundnut (Arachis hypogaea) is an economically important legume crop in Vietnam and many other countries worldwide. Stem and pod rot, caused by the soilborne fungus Sclerotium rolfsii, is a major yield-limiting factor in groundnut cultivation. To develop sustainable measures to control this disease, fundamental knowledge of the epidemiology and diversity of S. rolfsii populations is essential. In this study, disease incidence was monitored in eight groundnut areas in central Vietnam with a total of 240 observational field plots. The results showed that 5 to 25% of the field-grown groundnut plants were infected by S. rolfsii. Based on internal transcribed spacer (ITS) ribosomal DNA sequence analyses, three distinct groups were identified among a total of 103 randomly selected S. rolfsii field isolates, with the majority of the isolates (n = 90) in one ITS group. S. rolfsii isolates originating from groundnut, tomato, and taro were all pathogenic on groundnut and relatively sensitive to the fungicide tebuconazole but displayed substantial diversity of various genetic and phenotypic traits, including mycelial compatibility, growth rate, and sclerotial characteristics.