Mulberry, the backbone of sericulture industry, is a rainfed crop, and its biomass production is affected adversely under drought conditions. In this study, genes expressed differentially during drought stress response have been examined by PCR-Select subtractive hybridization. The sensitive and tolerant genotypes were identified based on physiological evaluation by determination of proline content, electrolyte leakage, and measurement of relative water content. In total, 1,920 clones were sequenced, representing 208 contigs and 151 singletons. The expressed sequence tags generated from this subtracted cDNA library comprises a broad repertoire of stress-responsive genes, which contribute to the process of drought tolerance in mulberry. Additionally, 23% of the cDNA library is represented by transcripts of unknown function. The expression of a select number of these drought-inducible genes was studied based on cDNA macroarray and Northern blot analyses. In order to unravel the crosstalk with other abiotic stresses, expression profile of Arabidopsis homologs of selected genes in response to a wide range of different stresses was studied using Genevestigator as a reference expression database. The results of this study show that subtractive hybridization coupled with validation steps for differential screening is an effective method for identification of stress/drought-induced genes in plants with limited sequence information available.