Water deficit is a serious environmental stress and the major constraint to rice productivity. Losses in rice yield due to water shortage probably exceed losses from all other causes combined and the extent of the yield loss depends on both the severity and duration of the water stress. Drought affects rice at morphological, physiological, and molecular levels such as delayed flowering, reduced dry matter accumulation and partitioning, and decreased photosynthetic capacity as a result of stomatal closure, metabolic limitations, and oxidative damage to chloroplasts. Small-statured rice plants with reduced leaf area and short growth duration are better able to tolerate drought stress, although the mechanisms are not yet fully understood. Increased water uptake by developing larger and deeper root systems, and the accumulation of osmolytes and osmoprotectants are other important mechanisms for drought resistance. Drought resistance in rice has been improved by using plant growth regulators and osmoprotectants. In addition, several enzymes have been found that act as antioxidants. Silicon has also improved drought resistance in rice by silicification of the root endodermis and improving water uptake. Seed priming improves germination and crop stand establishment under drought. Rice plants expressing HVA1, LEA proteins, MAP kinase, DREB and endo-1, 3-glucanase are better able to withstand drought stress. Polyamines and several enzymes act as antioxidants and reduce adverse effects of drought stress in rice. Drought resistance can be managed by developing and selecting drought-tolerant genotypes. Rice breeding and screening may be based on growth duration, root system, photosynthesis traits, stomatal frequency, specific leaf weight, leaf water potential, and yield in target environments. This review discusses recent developments in integrated approaches, such as genetics, breeding and resource management to increase rice yield and reduce water demand for rice production.