Projections of future climate change include a strong likelihood of a doubling of current atmospheric carbon dioxide concentration ([CO2]) and possible shifts in precipitation patterns. Drought stress is a major environmental limitation for crop growth and yield and is common in rainfed rice production systems. This study was conducted to determine the growth and grain yield responses of rice to drought stress under [CO2] enrichment. Rice (cv. IR-72) was grown to maturity in eight naturally sunlit, plant growth chambers in atmospheric carbon dioxide concentrations [CO2] of 350 and 700 μmol CO2 mol–1 air. In both [CO2], water management treatments included continuously flooded (CF) controls, flood water removed and drought stress imposed at panicle initiation (PI), anthesis (ANT), and both panicle initiation and anthesis (PI & ANT). The [CO2] enrichment increased growth, panicles plant–1 and grain yield. Drought accelerated leaf senescence, reduced leaf area and above-ground biomass and delayed crop ontogeny. The [CO2] enrichment allowed 1–2 days more growth during drought stress cycles. Grain yields of the PI and PI & ANT droughts were similar to the CF control treatments while the ANT drought treatment sharply reduced growth, grain yield and individual grain mass. We conclude that in the absence of air temperature increases, future global increases in [CO2] should promote rice growth and yield while providing a modest reduction of near 10% in water use and so increase drought avoidance.