Drought is a recurring climatic hazard that reduces the crop yields. To avoid the negative effects of drought on crop production, extensive efforts have been devoted to investigating the complex mechanisms of gene expression and signal transduction during drought stress. Receptor-like kinases (RLKs) play important roles in perceiving extracellular stimuli and activating downstream signalling responses. The rice genome contains >1100 RLK genes, of which only two are reported to function in drought stress. A leucine-rich repeat (LRR)-RLK gene named Leaf Panicle 2 (LP2) was previously found to be strongly expressed in leaves and other photosynthetic tissues, but its function remains unclear. In the present study, it was shown that the expression of LP2 was down-regulated by drought and abscisic acid (ABA). Transgenic plants overexpressing LP2 accumulated less H2O2, had more open stomata in leaves, and showed hypersensitivity to drought stress. Further investigation revealed that transcription of LP2 was directly regulated by the zinc finger transcription factor DROUGHT AND SALT TOLERANCE (DST). In addition, LP2 was identified as a functional kinase localized to the plasma membrane and interacted with the drought-responsive aquaporin proteins OsPIP1; 1, OsPIP1; 3, and OsPIP2; 3. Thus, the findings provided evidence that the LRR-RLK LP2, transcriptionally regulated by the drought-related transcription factor DST, served as a negative regulator in drought response.