Seven rice genotypes differed in their drought tolerance along with their 21 F1 crosses obtained from a partial diallel crosses mating design were evaluated under water stress condition at the research farm of Rice Research and Training Center (RRTC), Sakha, Kafr El-Sheikh, Egypt during the two growing seasons of 2010 and 2011 to identify the superior parents and hybrids and to determine the appropriate breeding methods under this condition. The results indicated that, mean squares were highly significant for all studied traits indicating the presence of wide range of genetic variations among the parental lines used in this study. GCA/SCA ratio was greater than unity for panicles plant-1; panicle weight and 1000-grain weight traits suggesting the preponderance of additive type of gene action in these materials. The ratio was less than unity for grain yield plant-1, spikelet fertility percentage, filled grains panicle-1 and harvest index suggesting the preponderance of non-additive gene action. The drought tolerant parents: IRAT170; Moroberekan and Azuciena were the best general combiners for most yield and its component traits. High GCA effects showed the presence of favorable genes with additive type of gene action. Therefore, a multiple crossing program involving good general combiners found in the current study is recommended. Highly significant positive SCA effects were obtained by the cross Giza177 x Azuceina for all traits and the cross IR64 x Moroberekan for all traits except panicles plant-1. Based on SCA effects among the 21 crosses, the desirable crosses were eight for grain yield plant-1; seven for panicles plant-1; five for panicle weight; six for 1000-grain weight; nine for filled grains panicle-1; eight for spikelet fertility percentage and eleven for harvest index. F1 hybrids were recommended because of their good SCA for yield and its component traits under water stress condition. The heritability estimates in broad sense were high for all traits and ranged from 86.3% for harvest index to 98.07% for filled grains panicle-1. Low estimates of heritability in narrow sense were recorded for harvest index (14.62%); spikelets fertility percentage (16.03%) and grain yield plant-1 (17.53%). In contrary, the degree of dominance values were higher than unity for spikelets fertility percentage; harvest index and grain yield plant-1 traits indicating that the effect was of over-dominance type.