Alternate wetting and moderate soil drying irrigation (WMD) has been widely adopted in rice (Oryza sativa L.) production for saving irrigation water and increasing grain yield. However, limited information is available about the effect of WMD on rice grain quality. The main purpose of this study was to evaluate the characteristics of grain quality in response to WMD. Two rice varieties, Yangdao 6 (YD6, indica) and Hanyou 8 (HY8, japonica), were grown in the field, with two water management treatments, well‐watered (WW) and WMD from 10 d after transplanting to maturity. In comparison with WW, WMD prominently increased grain yield by 7.57 to 9.72%, and improved some grain quality parameters such as milling, appearance, and eating and cooking qualities, including increases in head rice and decreases in chalkiness. The two varieties showed the same tendency. However, WMD had a negative impact on some nutritional quality traits in rice grains, such as reduction in the contents of amino acids and the micronutrient elements Cu, Fe, Mn, Mo, Se, and Zn. The WMD treatment also markedly decreased As content and exhibited no significant effect on Cd content in grains. The results demonstrated that WMD has an overall impact on rice grain quality with both positive and negative effects.