The use of drip irrigation in upland rice (Oryza sativa L.) cultivation is a contemporary water-saving strategy. However, inadequate evidence is available related to consequential changes in water productivity on rice yield. The effects of distinctive drip irrigation treatments, namely differences in lateral distances (0.6, 0.8, and 1.0 m), dripper discharge rates (0.6 and 1.0 L per hour, Lph), irrigation methods (surface and subsurface), and the conventional aerobic rice production system (control) on, physiology and water productivity of rice were studied during the summer of 2012 and 2013. Grain yield significantly increased in the subsurface drip irrigation method laid out at 0.8 m lateral distance and in 1.0 Lph discharge rate (5389 kg ha–1) compared with control irrigation method (4181 kg ha–1). This treatment mounts up dry matter partitioning, leaf photosynthesis as well as root oxidizing power. In addition, drip irrigation in aerobic rice production system had twice the water productivity and stimulates longer roots with higher density compared with control irrigation method. The subsurface drip irrigation system with drippers/laterals of 0.8-m distance with flow rate 1.0 Lph, in aerobic rice production system is a cost-effective method and had the potential to save water (27.0%) without compromising grain yield in comparison to control irrigation method. This could be the promising technology to be recommended for aerobic rice production system. © 2018 by the American Society of Agronomy.