Improvements in yield and quality of rice are crucial for global food security. However, global rice production is substantially hindered by various biotic and abiotic stresses. Making further improvements in rice yield is a major challenge to the rice research community, which can be accomplished through developing abiotic stress-resilient rice varieties and engineering durable agrochemical-independent pathogen resistance in high-yielding elite rice varieties. This, in turn, needs increased understanding of the mechanisms by which stresses affect rice growth and development. Alternative splicing (AS), a post-transcriptional gene regulatory mechanism, allows rapid changes in the transcriptome and can generate novel regulatory mechanisms to confer plasticity to plant growth and development. Mounting evidence indicates that AS has a prominent role in regulating rice growth and development under stress conditions. Several regulatory and structural genes and splicing factors of rice undergo different types of stress-induced AS events, and the functional significance of some of them in stress tolerance has been defined. Both rice and its pathogens use this complex regulatory mechanism to devise strategies against each other. This review covers the current understanding and evidence for the involvement of AS in biotic and abiotic stress-responsive genes, and its relevance to rice growth and development. Furthermore, we discuss implications of AS for the virulence of different rice pathogens and highlight the areas of further research and potential future avenues to develop climate-smart and disease-resistant rice varieties.