DREB2s (dehydration-responsive element-binding protein 2s) are transcription factors that interact with a cis-acting DRE (dehydration-responsive element)/CRT (C-repeat) sequence and activate the expression of downstream genes involved in water- and heat-shock stress responses and tolerance in Arabidopsis thaliana. In this study, we performed a comprehensive analysis of all five DREB2-type genes in rice (OsDREB2 s: OsDREB2A, OsDREB2B, OsDREB2C, OsDREB2E and OsABI4) to determine which of them contribute to plant stress responses. We analysed the expression patterns of these genes under abiotic stress conditions, and we examined the subcellular localisation and transcriptional activation activity of their translational products in protoplasts. Only OsDREB2A and OsDREB2B showed abiotic stress-inducible gene expression. In addition, OsDREB2B showed nuclear specific localisation and the highest transactivation activity. OsDREB2B has functional and non-functional forms of its transcript similar to its orthologues in the grass family, and the functional form of its transcript was markedly increased during stress conditions. We analysed the splicing mechanism of OsDREB2B with transgenic rice that express the non-functional transcript and we found that the non-functional form is not a precursor of the functional form; thus, stress-inducible alternative splicing of pre-mRNA is an important mechanism for the regulation of OsDREB2B. Transgenic Arabidopsis plants overexpressing OsDREB2B showed enhanced expression of DREB2A target genes and improved drought and heat-shock stress tolerance. These results suggest that OsDREB2B is a key gene that encodes a stress-inducible DREB2-type transcription factor that functions in stress-responsive gene expression in rice.