Mitogen-activated protein kinase (MAPK) cascades have been identified in various signaling pathways involved in plant development and stress responses. We identified a drought-hypersensitive mutant (drought-hypersensitive mutant1 [dsm1]) of a putative MAPK kinase kinase (MAPKKK) gene in rice (Oryza sativa). Two allelic dsm1 mutants were more sensitive than wild-type plants to drought stress at both seedling and panicle development stages. The dsm1 mutants lost water more rapidly than wild-type plants under drought stress, which was in agreement with the increased drought-sensitivity phenotype of the mutant plants. DSM1-RNA interference lines were also hypersensitive to drought stress. The predicted DSM1 protein belongs to a B3 subgroup of plant Raf-like MAPKKKs and was localized in the nucleus. By real-time PCR analysis, the DSM1 gene was induced by salt, drought, and abscisic acid, but not by cold. Microarray analysis revealed that two peroxidase (POX) genes, POX22.3 and POX8.1, were sharply down-regulated compared to wild type, suggesting that DSM1 may be involved in reactive oxygen species (ROS) signaling. Peroxidase activity, electrolyte leakage, chlorophyll content, and 3,3'-diaminobenzidine staining revealed that the dsm1 mutant was more sensitive to oxidative stress due to an increase in ROS damage caused by the reduced POX activity. Overexpression of DSM1 in rice increased the tolerance to dehydration stress at the seedling stage. Together, these results suggest that DSM1 might be a novel MAPKKK functioning as an early signaling component in regulating responses to drought stress by regulating scavenging of ROS in rice.