Drought stress is a major constraint to the production and yield stability of soybean [Glycine max (L.) Merr.]. For developing high yielding varieties under drought conditions, the most widely employed criterion has traditionally been direct selection for yield stability over multiple locations. However, this approach is time consuming and labor intensive, because yield is a highly quantitative trait with low heritability, and influenced by differences arising from soil heterogeneity and environmental factors. The alternative strategy of indirect selection using secondary traits has succeeded only in a few crops, due to problems with repeatability and lack of phenotyping strategies, especially for root-related traits. Considerable efforts have been directed towards identifying traits associated with drought resistance in soybean. With the availability of the whole genome sequence, physical maps, genetics and functional genomics tools, integrated approaches using molecular breeding and genetic engineering offer new opportunities for improving drought resistance in soybean. Genetic engineering for drought resistance with candidate genes has been reported in the major food crops, and efforts for developing drought-resistant soybean lines are in progress. The objective of this review is to consolidate the current knowledge of physiology, molecular breeding and functional genomics which may be influential in integrating breeding and genetic engineering approaches for drought resistance in soybean.