Major histocompatibility complex (MHC) is the best characterized genetic region controlling disease resistance and immune responses in chicken. MHC genes are also involved in various non-immune functions such as productive traits and reproductive success. The genetic diversity of MHC in an Iranian indigenous chicken (Khorasan) was studied, and association of the MHC alleles with production traits was determined. The MHC polymorphism was ascertained by genotyping the LEI0258 microsatellite locus by PCR-based fragment analysis. LEI0258 microsatellite marker is a genetic indicator for MHC, which is located on microchromosome 16 and strongly associated with serologically defined MHC haplotypes. A total of 25 different LEI0258 alleles (185-493 bp) and 76 genotypes were identified in 313 chickens. An allele of 361 bp had the highest frequency (26.44%), and alleles of 207 and 262 bp had the lowest (0.16%). High level of heterozygosity (87%) and good genotype frequency fit to the Hardy-Weinberg equilibrium was observed in this population (P = 0.238). The association study also revealed a significant influence of MHC alleles on body weight, egg weight, egg laying intensity, and weight of sexual maturity in Khorasan population (P < 0.05). The information obtained from this study indicates a high MHC genetic diversity and the association of MHC alleles with important production traits in Khorasan chicken. These data would be applicable in designing breeding and genetic resource conservation for indigenous chicken populations.