Water scarcity around the globe and climate change challenges has forced the researchers to develop alternative production systems with higher water use efficiency. Direct seeded rice is the emerging water saving rice production system having higher water use efficiency. Field experiment was conducted to assess the role of different mulch systems in improving water use efficiency and productivity in direct seeded and transplanted rice. Three different rice production systems viz., transplanted rice with continuous flooding, two weeks continuous flooding after transplanting and direct seeding with supplemental irrigation only were evaluated under two ground cover systems i.e., plastic and straw mulching with no mulch taken as control. Super Basmati was used as experimental material. Continuously flooded transplanted rice with plastic mulching resulted in higher paddy yield (4.04 t ha- 1 ); while performance of no mulch direct seeding remained poor in this regard. Two weeks flooded transplanted rice with plastic mulching followed continuous flooding in paddy yield (3.94 t ha- 1 ). Continuously flooded transplanted rice with plastic mulching observed substantial improvement in yield related attributes such as panicle length, number of grains per panicle and 1000 grain weight. Plastic mulching improved the productivity and water use efficiency of transplanted as well as direct seeded rice. Higher water use efficiency was observed in direct seeded rice with plastic mulching as it was grown on supplemental irrigations. In crux productivity and water use efficiency of transplanted and especially direct seeded rice can be improved by using plastic film as mulch in current scenarios of water shortage. Key Words: mulching, rice production systems, water use efficiency, productivity