Genetics of drought tolerance in bread wheat was investigated using the six basic generations (P1, P2, F1, F2, BC1 & BC2) of the crosses between Kohistan-97 (high yielding), Inqlab-91 (medium yielding) and Chakwal-86 (low yielding). Significant differences among generations for different traits indicated the presence of genetic variability between the parent varieties. The results showed that type of gene action varied with the traits, crosses and treatments. Study of generation means analysis revealed that additive, dominance and epistatic effects were involved in the inheritance of yield and yield components. The traits days to heading, spikelets per spike, grain weight per spike and harvest index were controlled by additive genes coupled with high heritability. Normal distribution of traits showed the presence of quantitative inheritance. The results suggested that it may be possible to obtain drought tolerance and high yielding lines with a relatively simple breeding procedure involving no progeny test. Transgressive segregation of the traits showed that the crossing of varieties may result into useful recombination for drought resistance.