Sixty maize accessions were evaluated under normal and drought stress treatments. Selected tolerant and sensitive accessions were crossed in Line ´ Tester fashion and resultant F1 along with their parents were evaluated for drought tolerance in green house and field conditions. Data were recorded on morphological, physiological and biochemical parameters to estimate genetic variability, general and specific combining ability effects, heterosis manifestation, gene action, correlation and path analyses.Genetic variation among the entries under normal and drought stress treatments, indicated that this breeding material may be used for the development of drought tolerant types. Combining ability analysis exhibited variable direction and magnitude of general combining ability (GCA) effects among lines and testers and specific combining ability effects (SCA) among crosses. Lines 19191, 15139 and 15280 and testers 15104, 15064 and 15268 were best general combiners under normal and drought stress treatments. Results of SCA indicated that crosses 15139 × 15066, 15188 × 15091, 19179 × 15104, 19203 × 24669, 15280 × 15064 and 15158 ×15064 were best specific combiners. Crosses 15139 × 15104, 15139 × 15066, 15188 × 15091, 19179 × 15268 and 19179 × 15104 had also mid parent and better parent heterosis for various traits under all the treatments. Non-additive type of gene action was observed for all the traits. Association of traits based on correlation analysis showed that plant height, cobs per plant, kernels per row and kernels per cob had significant and positive correlation with grain yield per plant under normal and water deficit conditions. Path analysis revealed that days to 50% tasseling had highest positive direct effect on grain yield per plant under normal and chlorophyll b contents under stress field condition.