NAC family genes encode plant-specific transcription factors involved in diverse biological processes. In this study, the Arabidopsis NAC gene ATAF1 was found to be induced by drought, high-salinity, abscisic acid (ABA), methyl jasmonate, mechanical wounding, and Botrytis cinerea infection. Significant induction of ATAF1 was found in an ABA-deficient mutant aba2 subjected to drought or high salinity, revealing an ABA-independent mechanism of expression. Arabidopsis ATAF1-overexpression lines displayed many altered phenotypes, including dwarfism and short primary roots. Furthermore, in vivo experiments indicate that ATAF1 is a bona fide regulator modulating plant responses to many abiotic stresses and necrotrophic-pathogen infection. Overexpression of ATAF1 in Arabidopsis increased plant sensitivity to ABA, salt, and oxidative stresses. Especially, ATAF1 overexpression plants, but not mutant lines, showed remarkably enhanced plant tolerance to drought. Additionally, ATAF1 overexpression enhanced plant susceptibility to the necrotrophic pathogen B. cinerea, but did not alter disease symptoms caused by avirulent or virulent strains of P. syringae pv tomato DC3000. Transgenic plants overexpressing ATAF1 were hypersensitive to oxidative stress, suggesting that reactive oxygen intermediates may be related to ATAF1-mediated signaling in response to both pathogen and abiotic stresses.