Most high-yielding rice cultivars developed for irrigated conditions, including the widely grown lowland variety IR64, are highly susceptible to drought stress. This limits their adoption in rainfed rice environments where there is a risk of water shortage during the growing season. Mapping studies using lowland-by-upland rice populations have provided limited information about the genetic basis of variation in yield under drought. One approach to simultaneously improve and understand rice drought tolerance is to generate backcross populations, select superior lines in managed stress environments, and then evaluate which features of the selected lines differ from the recurrent parent. This approach was been taken with IR64, using a range of tolerant and susceptible cultivars as donor parents. Yields of the selected lines measured across 13 widely contracting water environments were generally greater than IR64, but genotype-by-environment effects were large. Traits expected to vary between IR64 and selected lines are plant height, because many donors were not semi-dwarf types, and maturity, because selection in a terminal stress environment is expected to favour earliness. In these experiments it was found that some lines that performed better under upland drought were indeed taller than IR64, but that shorter lines with good yield under drought could also be identified. In trials where drought stress developed in previously flooded (lowland) fields, height was not associated with performance. There was little change in maturity with selection. Other notable differences between IR64 and the selected backcross lines were in their responses to applied ABA and ethylene in greenhouse experiments at the vegetative stage and in leaf rolling observed under chronic upland stress in the field. These observations are consistent with the hypothesis that adaptive responses to drought can effectively allow for improved performance across a broad range of water environments. The results indicate that the yield of IR64 under drought can be significantly improved by backcrossing with selection under stress. In target environments where drought is infrequent but significant in certain years, improved IR64 with greater drought tolerance would be a valuable option for farmers.