Drought stress is one of the major yield limiting factors in grain legumes. The severity and intensity of drought stress are predicted to increase in the future. Drought stress in grain legumes at any stage causes significant yield reduction owing to a decrease in stand establishment (misfunctioning of germination enzymes like proteases and amylases), and nutrient uptake (decreasing water use efficiency), growth (disrupting cell division and leaf expansion), and yield formation (inhibiting photosynthesis). In this review, the major challenges of drought stress for grain legumes as germination and stand establishment, growth and development, light-harvesting and carbon fixation, yield formation, grain quality, and nutrient uptake are discussed. The options for crop improvement (breeding, OMICs, genomic, and transgenic) and crop management (agronomic options) have also been discussed. The crop improvement strategies as germplasm screening, using proteomics, metabolomics, transcriptomics, genomics, and use of biotechnological approaches along with crop management such as seed enhancement, adjustment of sowing time and planting geometry, soil amendments, and application of plant growth promoting microbes can help improve the field performance and productivity of grain legumes under drought stress. Water use can be economized with the use of information on soil water balance and crop phenological models.