In the wake of declining water availability for agricultural use that will severely disturb the cultivation of irrigated lowland rice (Oryza sativa), aerobic genotypes have been developed allowing rice to grow under drier conditions. However, canopy physiological and morphological characteristics associated with adaptation of aerobic rice to water-limited conditions have so far been understudied. Canopy architectural characters, light and nitrogen distribution parameters (i.e. the extinction coefficient for light, KL; and for nitrogen, KN; and their ratio KN:KL), plant growth and yield were examined in irrigated-lowland (cv. IR64) vs aerobic (cv. Apo) rice genotypes grown under three water regimes. Compared with cv. IR64, cv. Apo allocated less nitrogen to strongly shaded leaves, allowing the vertical nitrogen distribution to better acclimate to light distribution within the canopy. The KN:KL ratio increased with increasing water deficit, and cv. Apo (up to 49 % increase) had a higher increase than cv. IR64 (up to 24 % increase). This was attributed to the maintenance of erect leaves at the upper part of the canopy, allocation of less leaf area and less nitrogen to the shaded leaves under water deficit in cv. Apo. The observed differential response in the KN:KL ratio partly explained the difference in biomass gain and yield in response to water deficit between the two rice cultivars. We concluded that favourable above-ground architecture and canopy nitrogen profile relative to the light profile contributed greatly to the better performance of cv. Apo than cv. IR64 under dry conditions.