OsiSAP1, an A20/AN1 zinc-finger protein, confers water-deficit stress tolerance at different stages of growth by affecting expression of several endogenous genes in transgenic rice. Transgenic lines have been generated from rice constitutively expressing OsiSAP1, an A20/AN1 zinc-finger containing stress-associated protein gene from rice, driven by maize UBIQUITIN gene promoter and evaluated for water-deficit stress tolerance at different stages of growth. Their seeds show early germination and seedlings grow better under water-deficit stress compared to non-transgenic (NT) rice. Leaves from transgenic seedlings showed lesser membrane damage and lipid peroxidation under water-deficit stress. Relatively lower rate of leaf water loss has been observed in detached intact leaves from transgenic plants during late vegetative stage. Delayed leaf rolling and higher relative water content were also observed in transgenic plants under progressive water-deficit stress during reproductive developmental stage. Although reduction in grain yield is observed under unstressed condition, the relative water-deficit stress-induced yield losses are lower in transgenic rice vis-à-vis NT plants thereby resulting in yield loss protection. Transcriptome analysis suggests that overexpression of OsiSAP1 in transgenic rice results in altered expression of several endogenous genes including those coding for transcription factors, membrane transporters, signaling components and genes involved in metabolism, growth and development. A total of 150 genes were found to be more than twofold up-regulated in transgenic rice of which 43 genes are known to be involved in stress response. Our results suggest that OsiSAP1 is a positive regulator of water-deficit stress tolerance in rice.