Understanding the genetic changes underlying the phenotypic variation of Chinese donkeys is helpful for the genetic improvement and breeding of donkeys. However, the population structure and novel genes associated with morphological (coat color and body size) and adaptive (high-altitude adaptation) traits of Chinese donkeys remain largely unknown. Here, we analyzed 391 whole-genome sequencing (WGS) data of Chinese donkeys. Population genomic analyses showed that Chinese native donkey breeds mainly consist of three distinct populations (Southwest Plateau, North Plain, and Guanzhong Plain), and a newly discovered population (Guanzhong Plain) was identified. Moreover, we characterized a high-confidence list of 127, 117, and 169 selective signal genes for coat color, body size, and high-altitude adaptation, respectively. We discovered ARID3B gene with strong signals of selection, which may account for coat color in Chinese donkeys. Our study identified the EPAS1 as a high-altitude adaptive gene. However, the FAM184B gene shows a stronger signal in response to high-altitude environments in Chinese donkeys. Selective sweep and genome-wide association study (GWAS) analyses showed that LCORL and TMEM154 genes are potentially associated with body size in Chinese donkeys. Utilizing PacBio HiFi sequencing data, this study presents 15,954 highly reliable structural variations (SVs) between large- and small-sized donkeys. Utilizing SV data and a graph-based method, we identified an 880-bp deletion in the TMEM154 gene in Sichuan donkeys (small-sized) compared to Guanzhong donkeys (large-sized), which was verified by polymerase chain reaction (PCR) and is a candidate SV related to body size. Transcriptome sequencing data showed that the TMEM154 gene is highly expressed in the muscle of Guanzhong donkeys (large-sized) compared to Sichuan donkeys (small-sized). Multi-species alignment analysis revealed that the region surrounding the 880-bp deletion in the TMEM154 gene is conserved in horse, zebra, kiang, as well as two large-sized donkey breeds (Dezhou and Guanzhong), except in in the small-sized Sichuan donkey. Furthermore, after the 880 bp deletion was transfected into 3T3-L1 and HEK293T cells, it was demonstrated that the relative luciferase activity of the mutation was markedly decreased in comparison with that of the wild type. These results suggest that this 880-bp deletion in the TMEM154 gene may play an important role in the body size trait of donkeys. This study provides valuable genome resources for donkey breeding and sheds light on the domestication history of Chinese donkeys.