Breeding for improved blanchability—the propensity of the testa (skin) to be removed from the kernel following rapid heat treatment—is a priority for improvement in the Australian Peanut Breeding Program (APBP). Easy removal of the testa by blanching is required for processing of peanuts into peanut butter and various other confectionary products. Thus, blanchability is an economically important trait in any newly released cultivar in Australia. A better understanding of the range of genetic variation, nature of inheritance and genotype × environment (G×E) interactions, and the development of a low-cost method to phenotype in early generations, could speed up breeding for this trait. Studies were conducted to develop a low-cost, rapid method utilising minimal amounts of seed to phenotype in early generations, along with an assessment of G×E interactions over a range of years and environments to derive optimal selection protocols. Use of a smaller kernel sample size than standard (50 vs 200 g) was effective for accurately assessing blanchability in breeding lines and could allow selection in early generations (e.g. in seed produced from a single F₂ plant where seed supply is adequate). G×E interaction for blanchability was shown to be very low. Genotypic variance explained 62–100% of the total variance for blanchability, assessed in two diverse germplasm pools including 107 accessions in the USA mini-core over three environments and multiple APBP breeding lines grown over nine different years–environments. Genotypic correlations between all environments were very high (∼0.60–0.96), with heritability for the blanchability trait estimated to be very high (0.74–0.97) across the 13 trials. The results clearly demonstrate that effective selection for improved blanchability can be conducted in early generations and in a limited number of contrasting environments to ensure consistency of results.