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Climatic adaptation is an example of a genotype-by-environment interaction (G×E) of fitness. Selection upon gene expression regulatory variation can contribute to adaptive phenotypic diversity; however, surprisingly few studies have examined how genome-wide patterns of gene expression G×E are manifested in response to environmental stress and other selective agents that cause climatic adaptation. Here, we characterize drought-responsive expression divergence between upland (drought-adapted) and lowland (mesic) ecotypes of the perennial C₄ grass, Panicum hallii, in natural field conditions. Overall, we find that cis-regulatory elements contributed to gene expression divergence across 47% of genes, 7.2% of which exhibit drought-responsive G×E. While less well-represented, we observe 1294 genes (7.8%) with trans effects. Trans-by-environment interactions are weaker and much less common than cis …