Sunhemp (Crotalaria juncea L.) is a tropical leguminous crop valued for its multifaceted utility in fiber production, green manuring, and as a raw material in the manufacture of paper and rope. One of the major biotic stresses affecting sunhemp is phyllody disease, caused by a phytoplasma, specifically belonging to the “Candidatus Phytoplasma” spp. These are obligate intracellular pathogens classified under the class Mollicutes, and are primarily transmitted by sap-sucking insect vectors such as leafhoppers, and psyllids. Phyllody-infected plants exhibit a range of morphological abnormalities, including malformed floral structures, chlorosis, stunted growth, and proliferation of axillary shoots, resulting in significant agronomic losses. In the present study, the sunhemp genotype NTPSH 11-02 was subjected to gamma irradiation at doses of 20 kR, 30 kR, 40 kR, and 50 kR to induce genetic variability. The M₂ generation lines derived from these treatments were evaluated under natural field conditions to assess their resistance to phyllody. Out of 44 mutant genotypes, two genotypes, NTPSH 63 and NTPSH 32 exhibited moderate resistance to phyllody, while nine genotypes—NTPSH 24, NTPSH 31, NTPSH 36, NTPSH 39, NTPSH 41, NTPSH 48, NTPSH 53, NTPSH 56, and NTPSH 60 demonstrated a tolerant reaction under natural infestation. Phyllody infection was found to negatively impact key yield-contributing traits, including plant height, number of pods per plant, and 100-seed weight (test weight). A significant reduction in these parameters was observed in infected plants compared to healthy controls, underscoring the detrimental effect of phyllody on overall productivity and crop performance.