In smooth bromegrass (Bromus inermis Leyss), few efforts have been made to develop rapid and reliable physiological indices for selection of persistent and drought‐tolerant genotypes. In addition, the association of these indices with seasonal growth activity, such as summer dormancy and autumn recovery, has not been studied. In this research, 36 genotypes of smooth bromegrass were clonally propagated and evaluated under water stress and nonstress conditions during 2013 to 2014. Water stress greatly influenced physiological functions and persistence, which affect plant growth and biomass production. Among the 36 randomly selected genotypes from the progeny of 25 half‐sib polycross families of smooth bromegrass, high genotypic variation was observed for all measured traits. Leaf proline content was not correlated with drought tolerance and persistence. However, carotenoid content and water‐soluble carbohydrates were correlated with drought tolerance and can be suggested for indirect selection of drought‐tolerant genotypes. Three genotypes (G8IHA, G13HUN, and 32HUN) were found to be more drought tolerant than others based on stress tolerance index, higher dry matter yield, summer dormancy, and relatively higher persistence and autumn recovery.