Drought is one of the main constraints in peanut production in West Texas and eastern New Mexico regions due to the depletion of groundwater. A multi-seasonal phenotypic analysis of 10 peanut genotypes revealed C76-16 (C-76) and Valencia-C (Val-C) as the best and poor performers under deficit irrigation (DI) in West Texas, respectively. In order to decipher transcriptome changes under DI, RNA-seq was performed in C-76 and Val-C. Approximately 369 million raw reads were generated from 12 different libraries of two genotypes subjected to fully irrigated (FI) and DI conditions, of which ~329 million (90.2%) filtered reads were mapped to the diploid ancestors of peanut. The transcriptome analysis detected 4,508 differentially expressed genes (DEGs), 1554 genes encoding transcription factors (TFs) and a total of 514 single nucleotide polymorphisms (SNPs) among the identified DEGs. The comparative analysis between the two genotypes revealed higher and integral tolerance in C-76 through activation of key genes involved in ABA and sucrose metabolic pathways. Interestingly, one SNP from the gene coding F-box protein (Araip.3WN1Q) and another SNP from gene coding for the lipid transfer protein (Aradu.03ENG) showed polymorphism in selected contrasting genotypes. These SNPs after further validation may be useful for performing early generation selection for selecting drought-responsive genotypes.