In order to detect markers for drought stress tolerance, field experiments in Ethiopia were conducted for three years at two naturally drought-prone locations and two optimum moisture locations using 239 Ethiopian barley landraces and 21 barley breeding lines. Furthermore, a climate chamber experiment applying drought stress at different water regimes (70% soil water capacity (WC) for control and 20% WC for drought stress conditions) after flowering was conducted for selected 196 accessions. Results revealed reduced grain biomass by 47% and 80% under field and climate chamber conditions, respectively, as well as significantly (p < 0.05) reduced days to maturity and plant height, in both experimental designs. Based on 10,644 SNP markers, GWAS was conducted to identify marker trait associations (MTA) for drought stress tolerance. For days to maturity, relative chlorophyll content, plant height, number of seeds per spike, thousand kernel weight, and harvest index under field and climate chamber drought stress treatments, 58 significant MTAs were identified. In total, 41.4% of the MTAs were located on chromosome 2H, of which one is very close to the Ppd-H1 flowering locus. These findings underpin the importance of this genome region for drought tolerance. Another MTA on chromosome 1H was detected for days to maturity under field drought stress treatment in the vicinity of the known flowering time ELF3 gene. Additionally, 13 and 3 Ethiopian landraces that tolerate severe and moderate drought stress in climate chamber and field experiments were identified, respectively, using drought indices. The results highlight the tolerance of Ethiopian landraces to different levels of drought stress as well as their potential to be considered in future barley improvement programs.