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Marker-assisted backcross breeding enables selective insertion of targeted traits into the genome to improve yield, quality, and stress resistance in wheat. In the current investigation, we transferred four drought tolerance quantitative trait loci (QTLs) controlling traits, viz canopy temperature, normalized difference vegetative index, chlorophyll content, and grain yield from the drought-tolerant donor line, C306, into a popular high-yielding, drought-sensitive variety, HD2733. Marker-assisted selection coupled with stringent phenotypic screening was used to advance each generation. This study resulted in 23 improved lines carrying combinations of four drought tolerance QTLs with a range of 85.35%–95.79% background recovery. The backcross-derived lines gave a higher yield under moisture-deficit stress conditions compared with the recipient parent. They also showed higher phenotypic mean values for physiological traits and stability characteristics of HD2733. A promising genotype, HD3411, derived from this cross was identified for release after national multi-location coordinating trials under the All India Coordinated Wheat Improvement Project. Our study is a prime example of the advantages of precision breeding using integrating markers and phenotypic selection to develop new cultivars with desirable traits like drought tolerance.