Lotus root is a popular wetland vegetable which produces edible rhizome. At the molecular level, the regulation of rhizome formation is very complex, which has not been sufficiently addressed in research. In this study, to identify differentially expressed genes (DEGs) in lotus root, four libraries (L1 library: stolon stage, L2 library: initial swelling stage, L3 library: middle swelling stage, L4: later swelling stage) were constructed from the rhizome development stages. High-throughput tag-sequencing technique was used which is based on Solexa Genome Analyzer Platform. Approximately 5.0 million tags were sequenced, and 4542104, 4474755, 4777919, and 4750348 clean tags including 151282, 137476, 215872, and 166005 distinct tags were obtained after removal of low quality tags from each library respectively. More than 43% distinct tags were unambiguous tags mapping to the reference genes, and 40% were unambiguous tag-mapped genes. From L1, L2, L3, and L4, total 20471, 18785, 23448, and 21778 genes were annotated, after mapping their functions in existing databases. Profiling of gene expression in L1/L2, L2/L3, and L3/L4 libraries were different among most of the selected 20 DEGs. Most of the DEGs in L1/L2 libraries were relevant to fiber development and stress response, while in L2/L3 and L3/L4 libraries, major of the DEGs were involved in metabolism of energy and storage. All up-regulated transcriptional factors in four libraries and 14 important rhizome formation-related genes in four libraries were also identified. In addition, the expression of 9 genes from identified DEGs was performed by qRT-PCR method. In a summary, this study provides a comprehensive understanding of gene expression during the rhizome formation in lotus root.