Cattle and water buffalo belong to the same subfamily Bovinae and share chromosome banding and gene order homology. In this study, we used genome-wide Illumina BovineSNP50 BeadChip to analyze 91 DNA samples from three breeds of water buffalo (Nili-Ravi, Murrah and their crossbred with local GuangXi buffalos in China), to demonstrate the genetic divergence between cattle and water buffalo through a large single nucleotide polymorphism (SNP) transferability study at the whole genome level, and performed association analysis of functional traits in water buffalo as well. A total of 40,766 (75.5 %) bovine SNPs were found in the water buffalo genome, but 49,936 (92.5 %) were with only one allele, and finally 935 were identified to be polymorphic and useful for association analysis in water buffalo. Therefore, the genome sequences of water buffalo and cattle shared a high level of homology but the polymorphic status of the bovine SNPs varied between these two species. The different patterns of mutations between species may associate with their phenotypic divergence due to genome evolution. Among 935 bovine SNPs, we identified a total of 9 and 7 SNPs significantly associated to fertility and milk production traits in water buffalo, respectively. However, more works in larger sample size are needed in future to verify these candidate SNPs for water buffalo.