Sugarcane is one of the most important crops worldwide and is a key plant for the global production of sucrose. Sugarcane cultivation is severely affected by drought stress and it is considered as the major limiting factor for their productivity. In recent years, this plant has been subjected to intensive research focused on improving its resilience against water scarcity; particularly the molecular mechanisms in response to drought stress have become an underlying issue for its improvement. To better understand water stress and the molecular mechanisms we performed a de novo transcriptomic assembly of sugarcane (var. Mex 69–290). A total of 16 libraries were sequenced in a 2x100 bp configuration on a HiSeq-Illumina platform. A total of 536 and 750 genes were differentially up-regulated along with the stress treatments for leave and root tissues respectively, while 1093 and 531 genes were differentially down-regulated in leaves and roots respectively. Gene Ontology functional analysis showed that genes related to response of water deprivation, heat, abscisic acid, and flavonoid biosynthesis were enriched during stress treatment in our study. The reliability of the observed expression patterns was confirmed by RT-qPCR. Additionally, several physiological parameters of sugarcane were significantly affected due to stress imposition. The results of this study may help identify useful target genes and provide tissue-specific data set of genes that are differentially expressed in response to osmotic stress, as well as a complete analysis of the main groups is significantly enriched under this condition. This study provides a useful benchmark for improving drought tolerance in sugarcane and other economically important grass species.