Drought stress, which often occurs repeatedly across the world, can cause multiple and long-term effects on plant growth. However, the repeated drought–rewatering effects on plant growth remain uncertain. This study was conducted to determine the effects of drought–rewatering cycles on aboveground growth and explore the underlying mechanisms. Perennial ryegrass plants were subjected to three watering regimes: well-watered control (W), two cycles of drought–rewatering (D2R), and one cycle of drought–rewatering (D1R). The results indicated that the D2R treatment increased the tiller number by 40.9% and accumulated 28.3% more aboveground biomass compared with W; whereas the D1R treatment reduced the tiller number by 23.9% and biomass by 42.2% compared to the W treatment. A time-course transcriptome analysis was performed using crown tissues obtained from plants under D2R and W treatments at 14, 17, 30, and 33 days (d). A total number of 2272 differentially expressed genes (DEGs) were identified. In addition, an in-depth weighted gene co-expression network analysis (WGCNA) was carried out to investigate the relationship between RNA-seq data and tiller number. The results indicated that DEGs were enriched in photosynthesis-related pathways and were further supported by chlorophyll content measurements. Moreover, tiller-development-related hub genes were identified in the D2R treatment, including F-box/LRR-repeat MAX2 homolog (D3), homeobox-leucine zipper protein HOX12-like (HOX12), and putative laccase-17 (LAC17). The consistency of RNA-seq and qRT-PCR data were validated by high Pearson’s correlation coefficients ranging from 0.899 to 0.998. This study can provide a new irrigation management strategy that might increase plant biomass with less water consumption. In addition, candidate photosynthesis and hub genes in regulating tiller growth may provide new insights for drought-resistant breeding.