Basmati rice, owing to its characteristic aroma and long, slender grains, is a specialized group of rice (Oryza sativa L.) and is high in demand. Traditional basmati cultivars are tall, low yielding, and susceptible to diseases, especially bacterial blight. Conventional plant breeding approaches could bring only marginal improvement in basmati yield. This study reports improvement of traditional basmati cultivars for bacterial blight resistance and plant height. Using marker-assisted backcrossing we transferred two bacterial blight resistance genes, xa13 and Xa21, and semidwarfing gene, sd-1, into two traditional basmati cultivars, Basmati 370 and Basmati 386. Markers were also used for selecting aroma and amylose content of basmati cultivars. Along with marker-assisted selection (MAS), we practiced stringent phenotypic selection in the target environment in all the generations for faster recovery of the recurrent parent genotype. A set of BC2F6 progenies selected for semidwarf stature, bacterial blight resistance, aroma and nonsticky grains and having more than 90% of the recurrent-parent genome were evaluated for yield and yield components. Lines that significantly outyielded the recurrent parent and the check cultivars in station trials are being evaluated in multiple locations in national-level nurseries for identifying the lines that could be released as varieties. These lines, in addition to being released as cultivars, can also be used as immediate donors for further basmati improvement.