Plant responses to abiotic stresses are coordinated by arrays of growth and developmental programs. Phytohormones such as abscisic acid (ABA) and indole-3-acetic acid (IAA) play critical roles in developmental progresses and environmental responses through complex signalling networks. However, crosstalk between the two hormones at the biosynthesis level remains largely unknown. Here, we report that carotenoid-deficient mutants (phs1, phs2, phs3-1, phs4, and PDS-RNAi transgenic rice) were impaired in the biosynthesis of ABA and IAA. Under drought conditions, phs3-1 and PDS-RNAi transgenic rice showed larger stomata aperture and earlier wilting compared to the wild type at both seedling and panicle developmental stage. Interestingly, these carotenoid-deficient lines showed increased cold resistance, which was likely due to the combined effects of reduced IAA content, alleviated oxidative damage and decreased membrane penetrability. Furthermore, we found that IAA content was significantly declined in rice treated with fluridone (a carotenoid and ABA biosynthesis inhibitor), and expression of auxin synthesis and metabolism-related genes were altered in the fluridone-treated rice similar to that in the carotenoid-deficient mutants. In addition, exogenous IAA, but not ABA, could restore the dwarf phenotype of phs3-1 and PDS-RNAi transgenic rice. These results support a crosstalk between ABA and IAA at the biosynthesis level, and this crosstalk is involved in development and differentially affects drought and cold tolerance in rice.