The growth, development and biosynthesis of secondary metabolites in the plant is strongly affected by environmental stress. The pharmaceutical values of the medicinal plants depend on the presence of secondary metabolites that are affected by environmental stress. Drought stress is described as one of the most important abiotic factor that limits the growth and productivity of the plants. Bacopa monnieri has been used for centuries as a memory enhancer, anti-inflammatory, analgesic, antipyretic, sedative and antiepileptic agent. Adhatoda vasica is one of the important medicinal plants used with much success to treat asthma, chronic bronchitis, and other respiratory conditions. The aim of the present study was to study the effect of simulated water stress on medicinal plants Bacopa monnieri and Adhatoda vasica. Leaves of Bacopa monnieri and Adhatoda vasica were subjected to different levels of Polyethylene glycol (PEG) solution under room condition. In order to evaluate drought stress effect several parameters such as Proline, Relative water content (RWC) and Cell membrane stability were taken into consideration. The data obtained from the present study indicated that drought stress significantly affect proline, relative water content and cell membrane stability in both the plants.