Rhizomes are key organs for the establishment of perennial grass stands and adaptation to environmental stress. However, mechanisms regulating rhizome initiation and elongation under drought stress and during post-drought recovery remain unclear. The objective of this study is to investigate molecular factors and metabolic processes involved in drought effects and post-drought recovery in rhizome growth in perennial grass species by comparative transcriptomic and proteomic profiling. Tall fescue (Festuca arundinacea) (B-type rhizome genotype, 'BR') plants were exposed to drought stress and re-watering in growth chambers. The number and length of rhizomes were measured following drought stress and re-watering. Hormone and sugar contents were analysed, and transcriptomic and proteomic analyses were performed to identify metabolic factors, genes and proteins associated with rhizome development. Rhizome initiation and elongation were inhibited by drought stress, and were associated with increases in the contents of abscisic acid (ABA) and soluble sugars, but declines in the contents of indoleacetic acid (IAA), zeatin riboside (ZR) and gibberellin (GA4). Genes involved in multiple metabolic processes and stress defence systems related to rhizome initiation exhibited different responses to drought stress, including ABA signalling, energy metabolism and stress protection. Drought-inhibition of rhizome elongation could be mainly associated with the alteration of GA4 and antioxidants contents, energy metabolism and stress response proteins. Upon re-watering, new rhizomes were regenerated from rhizome nodes previously exposed to drought stress, which was accompanied by the decline in ABA content and increases in IAA, ZR and GA4, as well as genes and proteins for auxin, lipids, lignin and nitrogen metabolism. Drought-inhibition of rhizome initiation and elongation in tall fescue was mainly associated with adjustments in hormone metabolism, carbohydrate metabolism and stress-defence systems. Rhizome regeneration in response to re-watering involved reactivation of hormone and lipid metabolism, secondary cell-wall development, and nitrogen remobilization and cycling.