The embryonic leaflets of peanut (Arachis hypogaea) variety Huayu 20 were used as explants and pingyangmycin as a mutagen to induce somatic embryos. Four weeks after the inoculation, the survived explants were transferred to somatic embryo germination medium containing screening reagent hydroxyproline, and finally 15 regenerated plants were obtained. Pedigree breeding method was used during the following selection breeding, and three lines with significantly increased yield and 23 lines with high oil content were obtained from these mutant?offsprings. The line with both high yield and high oil content has passed peanut variety multi-location in Anhui province and was named “Yuhua 4”. Its yield was 16.63% higher than that of the control variety Baisha 1016, ranking the first in all the testing varieties. Yuhua 4 showed the characteristics of early maturity, small pod and high oil content. The oil content of kernels was 56.10%, higher than that of original parent Huayu 20 with 49.50% oil content, tested by the Ministry of Agriculture of Oil and Products Quality Supervision, Inspection and Test Center (Wuhan), and the yield was 15% higher than that of Huayu 20. It was concluded that in vitro mutagenesis and target screening was an effective way on creating new germplasm and breeding new variety in peanut.