Rice blast (Magnaporthe oryzae) and sheath blight (Rhizoctonia solani) are the two most devastating diseases of rice (Oryza sativa), and have severe impacts on crop yield and grain quality. Recent evidence suggests that ethylene (ET) may play a more prominent role than salicylic acid and jasmonic acid in mediating rice disease resistance. In this study, we attempt to genetically manipulate endogenous ET levels in rice for enhancing resistance to rice blast and sheath blight diseases. Transgenic lines with inducible production of ET were generated by expressing the rice ACS2 (1-aminocyclopropane-1-carboxylic acid synthase, a key enzyme of ET biosynthesis) transgene under control of a strong pathogen-inducible promoter. In comparison with the wild-type plant, the OsACS2-overexpression lines showed significantly increased levels of the OsACS2 transcripts, endogenous ET and defence gene expression, especially in response to pathogen infection. More importantly, the transgenic lines exhibited increased resistance to a field isolate of R. solani, as well as different races of M. oryzae. Assessment of the growth rate, generational time and seed production revealed little or no differences between wild type and transgenic lines. These results suggest that pathogen-inducible production of ET in transgenic rice can enhance resistance to necrotrophic and hemibiotrophic fungal pathogens without negatively impacting crop productivity.