This study investigates the functional role of OsHSBP1, a heat shock factor-binding protein, in regulating abiotic stress tolerance in rice, with the aim of enhancing climate resilience in the elite indica cultivar Bacthom 7 (BT7). Using Clustered Regularly Interspaced Short Palindromic Repeats/CRISPR-associated protein 9 (CRISPR/Cas9) genome editing, we generated transgene-free homozygous knockout lines targeting OsHSBP1 and evaluated their physiological, biochemical, and agronomic responses under heat stress. Mutant lines exhibited markedly improved tolerance to both stresses, with survival rates reaching 43–46% under heat stress, compared to near-zero in wildtype plants. Enhanced tolerance was associated with significantly increased catalase and peroxidase activities and reduced oxidative damage, including lower malondialdehyde content and decreased superoxide accumulation. Despite these stress-related advantages, the knockout lines showed minimal differences in key agronomic traits under normal growing conditions, with comparable plant height, tillering ability, grain yield, and amylose content relative to the wildtype. These results demonstrate that OsHSBP1 functions as a negative regulator of abiotic stress tolerance in rice, and its knockout enhances resilience without compromising yield potential. The study highlights OsHSBP1 as a promising target for precision breeding of climate-resilient rice cultivars.