Bacterial Blight (BB) caused by Xanthomonas oryzae pv. oryzae is a major disease of rice in tropical Asia. Since all the Basmati varieties are highly susceptible and the disease is prevalent in the entire Basmati growing region of India, BB is a severe constraint in Basmati rice production. The present study was undertaken with the objective of combining the important Basmati quality traits with resistance to BB by a combination of phenotypic and molecular marker-assisted selection (MAS). Screening of 13 near-isogenic lines of rice against four isolates of the pathogen from Basmati growing regions identified the Xa4, xa8, xa13 and Xa21 effective against all the isolates tested. Two or more of these genes in combination imparted enhanced resistance as expressed by reduced average lesion length in comparison to individual genes. The two-gene pyramid line IRBB55 carrying xa13 and Xa21 was found equally effective as three/four gene pyramid lines. The two BB resistance genes present in IRBB55 were combined with the Basmati quality traits of Pusa Basmati-1 (PB-1), the most popular high yielding Basmati rice variety used as recurrent parent. Phenotypic selection for disease resistance, agronomic and Basmati quality characteristics and marker-assisted selection for the two resistance genes were carried out in BC 1F 1, BC 1F 2 and BC 1F 3 generations. Background analysis using 252 polymorphic amplified fragment length polymorphism (AFLP) markers detected 80.4 to 86.7% recurrent parent alleles in BC 1F 3 selections. Recombinants having enhanced resistance to BB, Basmati quality and desirable agronomic traits were identified, which can either be directly developed into commercial varieties or used as immediate donors of BB resistance in Basmati breeding programs.