Water scarcity due to global warming can increase the water demand for upland rice at critical stages of crop development. However, there is little research on cultivar responses to this scenario and technologies that enhance water use efficiency (WUE). To determine the influence of water stress at and after flowering stages of drip-irrigated upland rice cultivars on physiology, yield, and WUE, a shelter experiment was conducted using a randomized block design with a split-plot arrangement of treatments. Three modern and one traditional cultivar were subjected to five irrigation managements: 100% of the field capacity considered the reference management (RM), 70 and 40% of the RM at the flowering stage, and 70 and 40% of the RM at the grain-filling stage. In general, the modern cultivars tended to maintain higher photosynthetic rate, stomatal conductance, transpiration, leaf water potential, and lower crop water stress index compared to the traditional cultivar under water stress. The WUE decreased for all cultivars under severe stress, averaging 0.55 and 0.62 kg m−3 when stress occurred at flowering and grain-filling, respectively, whereas moderate stress imposed at grain-filling maintained WUE for all cultivars, averaging 1.21 kg m−3. In addition, grain yield (GY) showed a similar variation trend under drought stress as WUE, and its reduction was mainly associated with low filled grain percentage. Among the five irrigation treatments, both GY and WUE were the highest in the RM; the best cultivar recorded 9.3 Mg ha−1 and 1.62 kg m−3, respectively. Findings suggest that attending to the full water demand under precision drip irrigation and appropriate cultivar selection can enhance upland rice production at significant levels.