Wheat (Triticum aestivum) is king of cereals and it is the staple food of the people of Pakistan. To understand the genetics of drought tolerance two promising elite lines V- 04189 and V-03138 were crossed to develop F1, F2 and back cross generations (BC1 and BC2). Six generations (P1, P2, F1, F2, BC1 and BC2) were raised under water stress conditions. Analysis of variance showed significant difference among generation means which indicated presence of sufficient genetic variability. Hybrid vigor was observed in most of the cases except plant height, spike length and flag leaf area. Generation means analysis revealed presence of additive [d], dominance [h] and epistasis genetic effects in the inheritance of traits. Two parameter model [md] provided the best fit for spike length, number of tillers per plant relative water contents and excised leaf water loss which shows the presence of additive genetic effect is prominent with simple inheritance while, [ml] showed best fit for grain yield per plant that indicates epistasis is involved in the inheritance of trait. The remaining traits exhibited higher parameter models and indicating the complex inheritance.