Foxtail millet (Setaria spp.) is an ancient cereal crop, having a short cropping cycle. Drought tolerance was assessed in this crop at an early growth stage and the extent of genetic diversity was measured between the foxtail millet genotypes, applying DNA markers. Tolerance of 18 foxtail millet genotypes was studied in vitro under four levels of polyethylene glycol (0, 10, 20 and 30% PEG-6000). PEG-6000 decreased final germination percentage and led to a reduction in shoot and root length with different stress levels. The genotypes ISe 869, ISe 1851 and yellow spike show superiority in stress tolerance for germination and the growth of root and shoot traits. They also clustered together in the biplot diagram and dendrogram of the genotypes based on the morphological traits. Marker polymorphism index (PI) was 80.36% and a total of 132 polymorphic alleles (4.00 alleles/locus) were obtained from 33 polymorphic primers. Polymorphic information content (0.54–0.83) was highly informative with an average value of 0.67. A dendrogram distributed the genotypes into five distinct clusters based on simple-sequence repeat (SSR) data, independent of their geographical distribution. A relationship was established between the SSR markers and the genotypes ability to tolerate drought stress. The SSR markers used could contribute to conducting DNA profiling of foxtail millet, and facilitating their use in future breeding programmes for drought tolerance in this crop. Based on water-stress experiment, three most tolerant genotypes: ISe 869, ISe 1851 and yellow spike are recommended to be cultivated under drought conditions around the world.