Rice, as the largest consumer of global freshwater resources, faces significant challenges due to increasing drought conditions exacerbated by climate change. In this study, we explore the critical role of FKBP12, a molecular chaperone protein, in modulating drought tolerance in rice. Utilizing a T-DNA insertional mutant (fkbp12) and FKBP12-overexpressing lines, we investigated the gene's influence on rice under various drought conditions. Our results revealed that the fkbp12 mutant exhibited significantly enhanced drought tolerance compared to the wild type, evidenced by improved water retention, reduced cellular damage, and an upregulated expression of key drought-responsive genes such as OsNCED3, OsSNAC1, and OsDREB2A. This suggests a compensatory upregulation of abscisic acid (ABA)-mediated pathways, enhancing the plant's ability to cope with water deficit. Conversely, overexpression of FKBP12 resulted in increased sensitivity to drought, likely due to disruption in stress signaling and reactive oxygen species (ROS) scavenging mechanisms. Additionally, we observed an impact on seed development, where the fkbp12 mutant presented smaller seed sizes, indicating a potential trade-off between growth and stress tolerance. This comprehensive analysis not only highlights the diverse roles of FKBP12 in drought stress response but also its implications for rice yield and seed development, providing valuable insights for breeding more resilient rice varieties in the face of escalating climate challenges.