Water scarcity is currently threatening almost every country in the arid regions. Using advanced generations, breeding can help in the development of improved bread wheat genotypes for adaptation to abiotic and biotic stresses. The pedigree selection was practiced on two bread wheat crosses (Sids 12 × Line 44) and (Line 20 × Sakha 93) during two seasons (2017−2018 and 2018–2019) under full irrigation (optimal conditions) and limited irrigation (drought-stressed) conditions at Kafer El-Hamam Agriculture Station, Agricultural Research Center, Giza, Egypt. The results indicated significant differences in two crosses of F2 and F3 families for all the studied traits under optimal irrigation and water stress. The estimates of phenotypic coefficients of variability (PCV) were slightly higher than those of genotypic coefficients of variability (GCV) for all the traits in two crosses of both water regimes. Broad-sense heritability (h2Bs) estimates, accompanied with high magnitudes of the genetic advance (GA), were higher under optimal irrigation than water stress in F2 and F3 generations of two crosses. A positive correlation was recorded between spikes per plant and grain yield in both water treatments of two crosses. A positive correlation (r) was revealed between offsprings (F3) and their parents (F2) in yield and its components under optimal irrigation and water stress conditions. Hence, the hybridization followed by selection under optimal and drought stress conditions have been a demand to accelerate the genetic gain of wheat grain yield.