Drought stress is an increasingly common and worrying phenomenon because it causes a loss of production in both agriculture and forestry. Teak is a tropical tree which needs alternating rainy and dry seasons to produce high-quality wood. However, a robust understanding about the physiological characteristics and genes related to drought stress in this species is lacking. Consequently, after applying moderate and severe drought stress to teak seedlings, an infrared gas analyzer (IRGA) was used to measure different parameters in the leaves. Additionally, using the root transcriptome allowed finding and analyzing the expression of several drought-related genes. As a result, in both water deficit treatments a reduction in photosynthesis, transpiration, stomatal conductance and leaf relative water content was found. As well, an increase in free proline levels and intrinsic water use efficiency was found when compared to the control treatment. Furthermore, 977 transcripts from the root contigs showed functional annotation related to drought stress, and of these, TgTPS1, TgDREB1, TgAREB1 and TgPIP1 were selected. The expression analysis of those genes along with TgHSP1, TgHSP2, TgHSP3 and TgBI (other stress-related genes) showed that with moderate treatment, TgTPS1, TgDREB1, TgAREB1, TgPIP1, TgHSP3 and TgBI genes had higher expression than the control treatment, but with severe treatment only TgTPS1 and TgDREB1 showed higher expression than the control treatment. At the end, a schematic model for the physiological and molecular strategies under drought stress in teak from this study is provided. In conclusion, these physiological and biochemical adjustments in leaves and genetic changes in roots under severe and prolonged water shortage situations can be a limiting factor for teak plantlets’ growth. Further studies of those genes under different biotic and abiotic stress treatments are needed.