Rice (Oryza sativa L.) is an important food crop that belongs to family Gramineae and needs a larger amount of water to complete its life cycle as compared to other crops. Hence, rice production is severely affected by water stress. Drought is an important issue in rainfed areas across the globe which limits rice production. Several morphological characters like germination, plant height, plant biomass, number of tillers, various root and leaf traits, physiological characters like photosynthesis, stomatal conductance, transpiration, water use efficiency, relative water content, chlorophyll content, photosystem-II activity, carbon isotope discrimination, membrane stability, and abscisic acid content of rice are reduced under drought conditions. Drought also induces the accumulation of several biochemical osmoprotectants like proline, polyamines, sugars, antioxidants and alters the expression of several genes including transcription factors and defense-related proteins, hence thereby affects the yield of rice crop. Drought escape, drought avoidance, and drought tolerance are the mechanisms that prevent plant from harmful effects of drought. Thus, this review is focused mainly on recent information about the morphological, physio-biochemical, and molecular effects, responses, and adaptation mechanisms of rice under drought stress. Here we also discussed that how we can improve the rice for drought tolerance using various molecular tools and techniques.