To identify the water stress induced genes of upland rice cultivar IRAT109, which is resistant to drought, a subtractive cDNA library was developed from polyethylene glycol- (PEG) treated and non-treated seedlings by suppression subtractive hybridization, from which 2112 recombinant colonies were obtained. Eight hundred clones were selected randomly for sequencing analysis, and 384 unique expressed sequence tags (ESTs) were obtained. They were found to be involved in diverse biological processes, such as metabolism, transcription, signal transduction, protein synthesis and others. Notably a number of known functional genes in drought tolerance, including genes related to biosynthesis of osmoprotectants,defense against active oxygen, removal of toxic compounds, recovery of proteins and reinforcement of cell wall were also found in the study. Several genes related to deleterious responses were upregulated by PEG stress. The differential expression patterns of 11 SSH-derived ESTs were confirmed by real-time polymerase chain reaction.