Drought is one of the critical factors limiting reproductive yields of rice and other crops globally. However, little is known about the molecular mechanism underlying reproductive development under drought stress in rice. To explore the potential gene function for improving rice reproductive development under drought, a drought induced gene, Oryza sativa Drought-Induced LTP (OsDIL) encoding a lipid transfer protein, was identified from our microarray data and selected for further study. OsDIL was primarily expressed in the anther and mainly responsive to abiotic stresses, including drought, cold, NaCl, and stress-related plant hormone abscisic acid (ABA). Compared with wild type, the OsDIL-overexpressing transgenic rice plants were more tolerant to drought stress during vegetative development and showed less severe tapetal defects and fewer defective anther sacs when treated with drought at the reproductive stage. The expression levels of the drought-responsive genes RD22, SODA1, bZIP46 and POD, as well as the ABA synthetic gene ZEP1 were up-regulated in the OsDIL-overexpression lines but the ABA degradation gene ABAOX3 was down-regulated. Moreover, overexpression of OsDIL lessened the down-regulation by drought of anther developmental genes (OsC4, CYP704B2 and OsCP1), providing a mechanism supporting pollen fertility under drought. Overexpression of OsDIL significantly enhanced drought resistance in transgenic rice during reproductive development, while showing no phenotypic changes or yield penalty under normal conditions. Therefore, OsDIL is an excellent candidate gene for genetic improvement of crop yield in adaption to unfavorable environments.