Drought stress, an important abiotic stress, has affected global agricultural production by limiting the yield and the quality of crops. Tiger nuts (Cyperus esculentus L.) are C4 crops in the Cyperaceae family, which have high-quality wholesome ingredients. However, data on mechanisms underlying the response of tiger nuts to drought stress are few. Here, the variety of Jisha 1 and 15% polyethylene glycol (PEG; a drought stress simulator) were used to study the mechanisms of stress response in tiger nuts. Our evaluation of the changes in physiological indicators such as electrolyte leakage (El), malondialdehyde (MDA), hydrogen peroxide (H2O2), superoxide anion (O2−) and activities of reactive oxygen species (ROS) showed that 12 h was the most suitable time point to harvest and analyze the response to drought stress. Thereafter, we performed transcriptome (RNA-Seq) analysis in the control (CK) and stress treatment groups and showed that there was a total of 1760 differentially expressed genes (DEGs). Gene Ontology (GO) analysis showed that the DEGs were enriched in abscisic acid (ABA) terms, and pathways such as starch and sucrose metabolism (ko00500), phenylpropanoid biosynthesis (ko00940) and plant hormone signal transduction (ko04075) were significantly enriched in the Kyoto Encyclopedia of Genes and Genomes (KEGG) analysis. In addition, quantitative real-time PCR (qRT-PCR) analysis of the DEGs demonstrated an upregulation of ABA and lignin content, as well as enzyme activities in enriched pathways, which validated the RNA-Seq data. These results revealed the pathways and mechanisms adopted by the tiger nuts in response to drought stress.