A gamma ray irradiation induced dwarf-type mutant (7-9) with increased drought resistance has been selected in our laboratory. The objective of this study was to explore the mechanism associated with dwarfism and drought resistance in the mutant as compared to its wild type. Higher levels of gibberellins (GA) and IAA were observed in 7-9 compared to the wild type, indicating that GAs and IAA are not associated with the dwarfism. Dehydration treatment resulted in accumulation of ABA, while higher level was observed in 7-9 compared to the wild type. Given that ABA induces antioxidant enzymes and higher activities of antioxidant enzyme exist in 7-9 compared to the wild type under drought stress, our data suggested that regulation of ABA synthesis is associated with the elevated drought resistance in 7-9. Suppression subtractive hybridization (SSH) was also used to screen the differentially expressed genes in relation to dwarfism and drought. A total of 226 cDNA clones were harvested, most of the cDNA inserts ranged from 250 to 800 bp in size. Dot blot hybridization revealed that there were 45 or 23 clones showing differential expression between 7-9 and the wild type under non-stressed condition or under drought condition. By using qRT-PCR, transcript level under non-stressed condition and time course response to drought were analyzed in five genes, cycloartenol-C-24-methyltransferase 1 (CMT1), adenosylhomocysteinase (SAHH), S-adenosylmethionine decarboxylase 3 (SAMDC3), myb, and a putative BTB/POZ domain containing protein. Two candidate genes were further cloned. Their functions in control of dwarfism and drought resistance of 7-9 will be identified through up- and down-regulation of the genes in transgenic plants.