Potato (Solanum tuberosum L.) is the most important tuber crop worldwide. An effort is underway to transform the crop from a clonally propagated tetraploid into a diploid seed-propagated, inbred line-based hybrid, which requires a better understanding of its highly heterozygous genome of potato. Here, we report the 1.67 Gb haplotype-resolved assembly of a diploid potato, RH89-039-16, using the combination of multiple sequencing and mapping strategies, including circular consensus sequencing. Comparison of the two haplotypes revealed ~2.1% intra-genome diversity, including 22,134 predicted deleterious mutations in 10,642 annotated genes. In a total of 20,583 pairs of allelic genes, 16.6% and 30.8% exhibited differential expression and methylation between alleles, respectively. Deleterious mutations and differentially expressed alleles were dispersed throughout both haplotypes, complicating strategies to eradicate deleterious alleles or stacking of beneficial alleles, via meiotic recombination. Further cataloguing of functional haplotypes, in diploid potato, could enable exploitation of heterosis using genotypes with complementary haplotypes. This study offers a holistic view of the genome organization of a clonally propagated diploid species, as well as provides insights into technological evolution in resolving complex genomes.