A novel DREB (dehydration responsive element binding) gene, designated PeDREB2, was isolated from the desert-grown tree, Populus euphratica. Based on multiple sequence alignment and phylogenetic characterization, PeDREB2 was classified as an A-2 group member of the DREB family. Expression of PeDREB2 was induced by cold, drought, and high salinity, but not by abscisic acid (ABA) treatment. PeDREB2 could bind specifically to DRE elements and was targeted to the nucleus when transiently expressed in onion epidermis cells. 35S promoter-driven expression of PeDREB2 improved salt tolerance in transgenic tobacco and did not cause growth retardation. The results indicate that PeDREB2 functions as a novel transcription factor involved in the response of salt stress and might be useful in improving salt tolerance in transgenic plants.