C-4 plants have the inherent capacity to concentrate atmospheric CO2 in the vicinity of RuBisCo, thereby increasing carboxylation, and inhibiting photorespiration. Carbonic anhydrase (CA), the first enzyme of C-4 photosynthesis, converts atmospheric CO2 to HCO3-, which is utilized by PEPC to produce C-4 acids. Bioengineering of C-4 traits into C-3 crops is an attractive strategy to increase photosynthesis and water use efficiency. In the present study, we isolated the PEPC gene from the C-4 plant Setaria italica and transferred it to C-3 rice. Overexpression of SiPEPC resulted in a 2-6-fold increment in PEPC enzyme activity in transgenic lines with respect to non-transformed control. Photosynthetic efficiency was enhanced in transformed plants, which was associated with increased Phi EFPSII, ETR, lower NPQ, and higher chlorophyll accumulation. Water use efficiency was increased by 16-22% in PEPC transgenic rice lines. Increased PEPC activity enhanced quantum yield and carboxylation efficiency of PEPC transgenic lines. Transgenic plants exhibited higher light saturation photo-synthesis rate and lower CO2 compensation point, as compared to non-transformed control. An increase in net photosynthesis increased the yield by (23-28.9%) and biomass by (24.1-29%) in transgenic PEPC lines. Altogether, our findings indicate that overexpression of C-4-specific SiPEPC enzyme is able to enhance photosynthesis and related parameters in transgenic rice.