Drought is the most challenging abiotic stress for rice production in the world. Thus, developing new rice genotype tolerance to water scarcity is one of the best strategies to achieve and maximize high yield potential with water savings. The study aims to characterize 16 rice genotypes for grain and agronomic parameters under normal and drought stress conditions, and genetic differentiation, by determining specific DNA markers related to drought tolerance using Simple Sequence Repeats (SSR) markers and grouping cultivars, establishing their genetic relationship for different traits. The experiment was conducted under irrigated (normal) and water stress conditions. Mean squares due to genotype × environment interactions were highly significant for major traits. For the number of panicles/plants, the genotypes Giza179, IET1444, Hybrid1, and Hybrid2 showed the maximum mean values. The required sterility percentage values were produced by genotypes IET1444, Giza178, Hybrid2, and Giza179, while, Sakha101, Giza179, Hybrid1, and Hybrid2 achieved the highest values of grain yield/plant. The genotypes Giza178, Giza179, Hybrid1, and Hybrid2, produced maximum values for water use efficiency. The effective number of alleles per locus ranged from 1.20 alleles to 3.0 alleles with an average of 1.28 alleles, and the He values for all SSR markers used varied from 0.94 to 1.00 with an average of 0.98. The polymorphic information content (PIC) values for the SSR were varied from 0.83 to 0.99, with an average of 0.95 along with a highly significant correlation between PIC values and the number of amplified alleles detected per locus. The highest similarity coefficient between Giza181 and Giza182 (Indica type) was observed and are susceptible to drought stress. High similarity percentage between the genotypes (japonica type; Sakha104 with Sakha102 and Sakha106 (0.45), Sakha101 with Sakha102 and Sakha106 (0.40), Sakha105 with Hybrid1 (0.40), Hybrid1 with Giza178 (0.40) and GZ1368-S-5-4 with Giza181 (0.40)) was also observed, which are also susceptible to drought stress. All genotypes are grouped into two major clusters in the dendrogram at 66% similarity based on Jaccard’s similarity index. The first cluster (A) was divided into two minor groups A1 and A2, in which A1 had two groups A1-1 and A1-2, containing drought-tolerant genotypes like IET1444, GZ1386-S-5-4 and Hybrid1. On the other hand, the A1-2 cluster divided into A1-2-1 containing Hybrid2 genotype and A1-2-2 containing Giza179 and Giza178 at coefficient 0.91, showing moderate tolerance to drought stress. The genotypes GZ1368-S-5-4, IET1444, Giza 178, and Giza179, could be included as appropriate materials for developing a drought-tolerant variety breeding program. Genetic diversity to grow new rice cultivars that combine drought tolerance with high grain yields is essential to maintaining food security.