Rice quantitative trait locus (QTL) qDTY12.1 is a major-effect drought yield QTL that was identified from a cross of Vandana (recipient parent) and Way Rarem (donor parent) through breeding efforts to improve rice yield under upland drought stress conditions. The two main physiological effects previously observed to be related to the presence of qDTY12.1 were (i) increased lateral root growth, and (ii) increased transpiration efficiency. Since relatively more progress has thus far been made on characterising the lateral root growth response related to qDTY12.1, the present study focussed on characterising how qDTY12.1 confers higher transpiration efficiency under upland drought stress in the Vandana background. In a series of field experiments in which stomatal conductance was measured across different times of day in four qDTY12.1 near isogenic lines (NILs), the NILs and Way Rarem showed consistently higher stomatal conductance than Vandana under conditions of low vapour pressure deficit (VPD) and low photosynthetically active radiation (PAR), and consistently lower stomatal conductance than Vandana under highVPDand high PAR. Leaf d18Owas higher in the qDTY12.1 NIL than in Vandana, and although this trend was previously observed for leaf d13Cit appeared to be more consistent across measurement dates and treatments for leaf d18O. The qDTY12.1 NILs andWayRarem tended to show greater large vein to small vein interveinal distance and mesophyll area than Vandana, also consistent across treatments. In terms of aquaporin-related plant hydraulics, variation among NILs in terms of aquaporin inhibition of root hydraulic conductivity (Lpr) was observed, with the highest-yielding NIL showing a lack of Lpr inhibition similar toWayRarem. The results reported here suggest that the effects of qDTY12.1 are in response not only to soil moisture, but also to atmospheric conditions. Aninteraction among multiple mechanisms including leaf anatomy and aquaporin function appear to confer the transpiration efficiency effect of qDTY12.1.