The present investigation entitled “Physiological characterization of rice germplasm for drought tolerance and yield regulating mechanism under different water regimes” was conducted at Instructional farm of I.G.A.U, Raipur during kharif season of 2006 with twenty germplasm lines. The experiment was also carried out in net house (control condition) and rain out shelter to protect the drought plots from rain and also for getting the samples for biochemical analysis. Germplasm is a valuable source of base population and provides the material for breeding. The nature and magnitude of divergence would help the plant breeder in choosing the right type of parents for broad spectrum of variability.