Ubiquitination plays important roles in plant hormone signal transduction. We show that the RING finger E3 ligase, Arabidopsis thaliana SALT- AND DROUGHT-INDUCED RING FINGER1 (SDIR1), is involved in abscisic acid (ABA)-related stress signal transduction. SDIR1 is expressed in all tissues of Arabidopsis and is upregulated by drought and salt stress, but not by ABA. Plants expressing the ProSDIR1-beta-glucuronidase (GUS) reporter construct confirmed strong induction of GUS expression in stomatal guard cells and leaf mesophyll cells under drought stress. The green fluorescent protein-SDIR1 fusion protein is colocalized with intracellular membranes. We demonstrate that SDIR1 is an E3 ubiquitin ligase and that the RING finger conservation region is required for its activity. Overexpression of SDIR1 leads to ABA hypersensitivity and ABA-associated phenotypes, such as salt hypersensitivity in germination, enhanced ABA-induced stomatal closing, and enhanced drought tolerance. The expression levels of a number of key ABA and stress marker genes are altered both in SDIR1 overexpression and sdir1-1 mutant plants. Cross-complementation experiments showed that the ABA-INSENSITIVE5 (ABI5), ABRE BINDING FACTOR3 (ABF3), and ABF4 genes can rescue the ABA-insensitive phenotype of the sdir1-1 mutant, whereas SDIR1 could not rescue the abi5-1 mutant. This suggests that SDIR1 acts upstream of those basic leucine zipper family genes. Our results indicate that SDIR1 is a positive regulator of ABA signaling.