Drought stress is the major factor limiting yield and yield stability of crops. To improve plant performances under drought conditions direct selection for yield over multiple locations has traditionally been employed. This approach is hampered by low heritability and high G × E interaction influenced by differences arising from soil heterogeneity and others environmental factors. The indirect selection using secondary traits has succeeded only in a few cases, due to problems with repeatability and lack of high-throughput phenotyping strategies. During last years, considerable efforts have been directed towards identifying physiological traits associated with yield and drought resistance. With the availability of whole genome sequences, physical maps, genetics and functional genomics tools for many crops, integrated approaches using molecular breeding and genetic engineering offer new opportunities for improving yield in drought prone conditions. The identification of the genetic bases of important physiological traits and the cloning of the genes sustaining yield in drought-prone environments will move the selection toward a “breeding by design” approach that will accumulate an increasing number of useful traits into elite genotypes that, in turn, will result in a reduction of the gap between yield potential and actual yield.