The occurrence of drought stress at seed filling stage is known to cause severe yield reduction in soybean especially where the crop is grown in rainfed conditions. Screening of large germplasm lines under natural drought conditions is extremely difficult to execute due to unusual rains. In the present study, about 328 germplasm lines are screened for terminal drought tolerance by spraying of potassium iodide (KI) at R5 stage and the tolerant lines were again retested under similar conditions in the subsequent year. The lines were classified as tolerant, moderately tolerant and susceptible based on the relative reduction in seed yield and 100-seed weight of treated over control conditions. The Shannon diversity index (SDI) indicated that genotypes were highly diverse for seed colour (HꞋ= ) and hilum colour (HꞋ= ). The PCA biplot analysis revealed that lines were more compactly and closely placed under controlled conditions as against treated. Four genotypes (TGX1835-3E, VSL-69, EC-105780 and PK-1243) were identified as relatively drought tolerant lines as they showed less reduction for number of pods per plant, seed yield and hundred seed weight under KI induced drought conditions. These lines were again validated next year and were found to be potential source for the development of drought tolerant varieties for the sustainable soybean production. | Evaluation of soybean germplasm lines for agro-morphological traits and terminal drought tolerance