Kentucky bluegrass (Poa pratensis L.) is an excellent cool-season turfgrass utilized widely in Northern China. However, turf quality of Kentucky bluegrass declines significantly due to drought. Ethephon seeds-soaking treatment has been proved to effectively improve the drought tolerance of Kentucky bluegrass seedlings. In order to investigate the effect of ethephon leaf-spraying method on drought tolerance of Kentucky bluegrass and understand the underlying mechanism, Kentucky bluegrass plants sprayed with and without ethephon are subjected to either drought or well watered treatments. The relative water content and malondialdehyde conent were measured. Meanwhile, samples were sequenced through Illumina. Results showed that ethephon could improve the drought tolerance of Kentucky bluegrass by elevating relative water content and decreasing malondialdehyde content under drought. Transcriptome analysis showed that 58.43% transcripts (254,331 out of 435,250) were detected as unigenes. A total of 9.69% (24,643 out of 254,331) unigenes were identified as differentially expressed genes in one or more of the pairwise comparisons. Differentially expressed genes due to drought stress with or without ethephon pre-treatment showed that ethephon application affected genes associated with plant hormone, signal transduction pathway and plant defense, protein degradation and stabilization, transportation and osmosis, antioxidant system and the glyoxalase pathway, cell wall and cuticular wax, fatty acid unsaturation and photosynthesis. This study provides a theoretical basis for revealing the mechanism for how ethephon regulates drought response and improves drought tolerance of Kentucky bluegrass.