Panicum hallii is an emerging model for genetic studies of agronomic traits in Panicum, presenting a tractable diploid alternative study system to the tetra- or octaploid biofuel crop switchgrass (Panicum virgatum). To characterize the gene complement in P. hallii var. filipes and enable gene expression analysis in this system we sequenced, assembled, and annotated the transcriptome. Over 300 Mb of normalized cDNA prepared from multiple tissues and treatments was sequenced using 454-Titanium, producing an annotated assembly including 15 422 unique gene names. Comparison with other grass genomes identified putative P. hallii homologs for >14 000 previously characterized genes. We also developed an atlas of gene expression across tissues and stages using RNA-Seq (the quantitative analysis of short cDNA reads). SOLiD sequencing and quantitative analysis of more than 40 million cDNA tags identified substantial variation in expression profiles among tissues, consistent with known functional differences. Putative homologs were found for all enzymes in the phenylpropanoid pathway leading to lignin biosynthesis, including genes with known effects on biomass conversion efficiency. The resources developed here will enable studies of the genes underlying variation in cell wall composition, drought tolerance, and biomass production in Panicum.