Histone deacetylases (HDACs) play crucial roles in plant stress responses via modification of histone as well as non-histone proteins; however, how HDAC-mediated deacetylation of non-histone substrates affects protein functions remains elusive. Here, we report that the Reduced Potassium Dependency3/Histone Deacetylase1 (RPD3/HDA1)-type histone deacetylase OsHDA716 and plant U-box (PUB) E3 ubiquitin ligase OsPUB75 form a complex to regulate rice drought response via deactivation and degradation of basic leucine zipper (bZIP) transcription factor OsbZIP46 in rice (Oryza sativa). OsHDA716 decreases ABA-induced drought tolerance, and mechanistic investigations showed that OsHDA716 interacts with and deacetylates OsbZIP46, a key regulator in ABA signaling and drought response, thus inhibiting its transcriptional activity. Furthermore, OsHDA716 recruits OsPUB75 to facilitate ubiquitination and degradation of deacetylated OsbZIP46. Therefore, the OsPUB75-OsHDA716 complex exerts double restrictions on the transcriptional activity and protein stability of OsbZIP46, leading to repression of downstream drought-responsive gene expression and consequently resulting in reduced drought tolerance. Conversely, OsbZIP46 acts as an upstream repressor to repress OsHDA716 expression, and therefore OsHDA716 and OsbZIP46 form an antagonistic pair to reciprocally inhibit each other. Genetic evidence showed that OsHDA716 works with OsbZIP46 in a common pathway to antagonistically regulate rice drought response, revealing that plants can fine-tune stress responses by the complex interplay between chromatin regulators and transcription factors. Our findings unveil an acetylation-dependent regulatory mechanism governing protein functions and shed light on the precise coordination of activity and stability of key transcription factors through a combination of different post-translational modifications.