Cultivated rice consists of two subspecies, Indica and Japonica, that exhibit well-characterized differences at the morphological and genetic levels. However, the differences between these subspecies at the transcriptome level remains largely unexamined. Here, we provide a comprehensive characterization of transcriptome divergence and cis-regulatory variation within rice using transcriptome data from 91 accessions from a rice diversity panel (RDP1). The transcriptomes of the two subspecies of rice are highly divergent. The expression and genetic diversity was significantly lower within Japonica relative to Indica, which is consistent with the known population bottleneck during Japonica domestication. Moreover, 1,860 and 1,325 genes showed differences in heritability in the broad and narrow sense respectively, between the subspecies, which was driven largely by environmental and genetic effects rather than differences in phenotypic variability. We leveraged high-density genotypic data and transcript levels to identify cis-regulatory variants that may explain the genetic divergence between the subspecies. We identified significantly more eQTL that were specific to the Indica subspecies compared to Japonica, suggesting that the observed differences in expression and genetic variability also extends to cis-regulatory variation. We next explored the potential causes of this cis-regulatory divergence by assessing local genetic diversity for cis-eQTL. Local genetic diversity around subspecies-specific cis-eQTL was significantly lower than genome-wide averages in subspecies lacking the eQTL, suggesting that selective pressures may have shaped regulatory variation in each subspecies. This study provides the first comprehensive characterization of transcriptional and cis-regulatory variation in cultivated rice, and could be an important resource for future studies.