Abstract Background Rice false smut caused by Ustilaginoidea virens has recently become one of the most devastating rice diseases worldwide. Breeding and deployment of resistant varieties is considered as the most effective strategy to control this disease. However, little is known about the genes and molecular mechanisms underlying rice resistance against U. virens. Results To explore genetic basis of rice resistance to U. virens, differential expression profiles in resistant ‘IR28’ and susceptible ‘LYP9’ cultivars during early stages of U. virens infection were compared using RNA-Seq data. The analyses revealed that 748 genes were up-regulated only in the resistant variety and 438 genes showed opposite expression patterns between the two genotypes. The genes encoding receptor-like kinases and cytoplasmic kinases were highly enriched in this pool of oppositely expressed genes. Many pathogenesis-related (PR) and diterpene phytoalexin biosynthetic genes were specifically induced in the resistant variety. Interestingly, the RY repeat motif was significantly more abundant in the 5’-regulatory regions of these differentially regulated PR genes. Several WRKY transcription factors were also differentially regulated in the two genotypes, which is consistent with our finding that the cis-regulatory W-boxes were abundant in the promoter regions of up-regulated genes in IR28. Furthermore, U. virens genes that are relevant to fungal reproduction and pathogenicity were found to be suppressed in the resistant cultivar. Conclusion Our results indicate that rice resistance to false smut may be attributable to plant perception of pathogen-associated molecular patterns, activation of resistance signaling pathways, induced production of PR proteins and diterpene phytoalexins, and suppression of pathogenicity genes in U. virens as well.