Myo-inositol oxygenase (MIOX), a unique monooxygenase, catalyzes the oxidation of myo-inositol to d-glucuronic acid. However, the protective role of MIOX in plants against oxidative stress or drought stress remains unknown. In this study, the functional characterization of MIOX obtained from the cDNA library of upland rice (Oryza sativa L. cv. IRAT109), was performed. OsMIOX was expressed predominantly in the roots and induced by drought, H₂O₂, salt, cold and abscisic acid. The transgenic rice lines overexpressing OsMIOX showed obviously improved growth performance in the medium containing 200 mM mannitol. Further, the survival rate of leaves from the transgenic rice lines was significantly higher than that of the wild type plants under polyethylene glycol treatment. It was discovered that the activity of ROS-scavenging enzymes and proline content, as well as the transcript levels of many ROS scavenging genes were significantly increased in transgenic plants compared to the wild type plants under drought stress conditions. Together, these data suggest that OsMIOX has a specific function in drought stress tolerance by decreasing oxidative damage.