β-lactoglobulin (β-LG) gene is suggested as a functional candidate gene for milk yield and milk composition. β-LG polymorphism has been reported to be associated with milk yield in cows, sheep and Indian goats. This study was performed to identify SNPs in exon 7 of β-LG gene and their association with milk traits in Iranian local Mahabadi goats using polymerase chain reaction (PCR)-single-strand conformation polymorphism (SSCP) and PCR-sequencing. Three SSCP patterns were observed with frequencies 0.678, 0.096 and 0.226, respectively. Subsequently, after sequencing each unique pattern nine novel mutations were identified. These mutations include: T InDel at nucleotide position 93 and substitutions T/C, T/G, T/C, G/T, T/G, T/C, G/A and A/T at nucleotide positions 99, 124, 126, 134, 147, 156, 176 and 177, respectively. Of these, seven mutations were same among the genotypic patterns while differences were related to T deletion and insertion (-/T) at nucleotide position 93 with frequencies 0.22 and 0.78 in the presence and absence of T allele, respectively; and substitution (A/T) at nucleotide position 177 with frequencies 0.16 and 0.84 for A and T alleles, respectively. Milk traits including milk production (gr), milk fat and protein (%) were also measured. These findings demonstrated that β-LG gene had a significant effect on milk protein percentage (P < 0.05), but had no significant effect on milk production and milk fat percentage.