Penoxsulam is an acetolactate synthase (ALS)-inhibiting herbicide usually applied by post-emergence foliar spraying (PFS) for the control of Echinochloa crus-galli and numerous annual weeds in paddy fields. Herbicides applied by foliar spraying can have negative impacts on the environment, ecosystems, and human health. In this study, the response of E. crus-galli and rice to the PFS and post-emergence water-dispersal (PWD) applications of penoxsulam, and the differences in the detoxification displayed by them between the two treatment methods were compared. The results showed that the PWD application of penoxsulam provides a similar control efficacy against E. crus-galli as PFS at the 1-, 3-, and 5-leaf stages. Meanwhile, the PWD application had a higher safety for the rice. After being treated with 30 g a.i. ha−1 penoxsulam, residues were not detected in the rice treated by the PWD application method, whereas, with the PFS treatment, there was 59.0 µg/kg penoxsulam remaining. With the PFS application, there were many more residues of penoxsulam in the E. crus-galli than with the PWD method; the amount of residues was 32-fold higher 12 h after treatment. The in vitro enzyme activity assays revealed that the activities of ALS, glutathione-S-transferase (GST), and cytochrome P450 monooxygenases (P450) were increased in the PWD treatments, and were 1.5-, 1.3-, and 2.3-fold higher than with PFS 72 h after treatment. The real-time quantitative PCR (qRT-PCR) revealed that the GST1 and P450 genes, CYP81A14, CYP81A12, CYP81A18, and CYP81A21 were upregulated with the PWD application versus PFS in the E. crus-galli. In summary, these results demonstrate that the herbicidal activity was not affected by the upregulation of target and metabolic enzyme activities with the PWD application of penoxsulam. This research could contribute to application strategies reducing the risk of rice injury and environmental impacts by using water-dispersal formulations of penoxsulam.