We identified and functionally characterized the AtSKIP gene (At1g77180), an Arabidopsis homologue of SNW/SKIP, under abiotic stresses. Although the SNW/SKIP protein has been implicated as a critical transcription cofactor, its biological functions have yet to be reported in any plant. Recently, we have isolated Salt-tolerance genes (SATs) via the overexpression screening of yeast with a maize cDNA library. One of the selected genes (SAT2) appeared to confer elevated tolerance to salt. Maize SAT2 cDNA encodes a homologue of the human SNW/SKIP transcriptional coregulator. Treatment with salt, mannitol and abscisic acid induced AtSKIP expression. Ectopic expression of the AtSKIP gene modulated the induction of salt tolerance, dehydration resistance and insensitivity towards abscisic acid under stress conditions. By contrast, atskip antisense lines displayed reduced tolerance to abiotic stresses during germination. Moreover, a decrease in AtSKIP expression resulted in an abnormal phenotype. We further determined that the AtSKIP protein activated the transcription of a reporter gene in yeast. Green fluorescent protein-tagged AtSKIP was localized in the nuclei of both onion cells and transgenic Arabidopsis cells. Taken together, these results suggest that AtSKIP functions as both a positive regulator and putative potential transcription factor in the abiotic stress signalling pathway.