KEY MESSAGE: This study identifies a small distal region of the 1RS chromosome from rye that has a positive impact on wheat yield. The translocation of the short arm of rye (Secale cereale L.) chromosome one (1RS) onto wheat (Triticum aestivum L.) chromosome 1B (1RS.1BL) is used in wheat breeding programs worldwide due to its positive effect on yield, particularly under abiotic stress. Unfortunately, this translocation is associated with poor bread-making quality. To mitigate this problem, the 1RS arm was engineered by the removal and replacement of two interstitial rye segments with wheat chromatin: a distal segment to introduce the Glu-B3/Gli-B1 loci from wheat, and a proximal segment to remove the rye Sec-1 locus. We used this engineered 1RS chromosome (henceforth 1RS(WW)) to develop and evaluate two sets of 1RS/1RS(WW) near isogenic lines (NILs). Field trials showed that standard 1RS lines had significantly higher yield and better canopy water status than the 1RS(WW) NILs in both well-watered and water-stressed environments. We intercrossed the 1RS and 1RS(WW) lines and generated two additional NILs, one carrying the distal (1RS(RW)) and the other carrying the proximal (1RS(WR)) wheat segment. Lines not carrying the distal wheat region (1RS and 1RS(WR)) showed significant improvements in grain yield and canopy water status compared to NILs carrying the distal wheat segment (1RS(WW) and 1RS(RW)), indicating that the 1RS region replaced by the distal wheat segment carries the beneficial allele(s). NILs without the distal wheat segment also showed higher carbon isotope discrimination and increased stomatal conductance, suggesting that these plants had improved access to water. The 1RS(WW), 1RS(WR) and 1RS(RW) NILs have been deposited in the National Small Grains Collection.