Drought is a serious threat to the sustainability of rice yields in rainfed agriculture. In particular, exposure to drought conditions during the stage of panicle development of a rice plant results in a delayed flowering time, reduced number of spikelets and poor grain filling. In our recent report, we functionally characterized the rice AP37 gene for drought tolerance during the vegetative and reproductive growth. Transgenic overexpression of the AP37 with the OsCc1 promoter in rice increased the tolerance to drought, high salinity and low temperature at the vegetative stage. The transgenic plants OsCc1:AP37 also showed significantly enhanced drought tolerance at the reproductive stage, as evidenced by the increase in grain yield by 16-57% over controls under severe field drought conditions. Thus, our results suggest that the AP37 gene has the potential to improve drought tolerance without causing undesirable growth phenotypes.