In higher plants, DREB1/CBF-type transcription factors play an important role in tolerance to low temperatures, drought, and high-salt stress. These transcription factors bind to CRT/DRE elements in promoter regions of target genes, regulating their expression. In this study, we cloned and characterized a novel gene encoding a DREB1 transcription factor from dwarf apple, Malus baccata (GenBank accession number: EF582842). Expression of MbDREB1 was induced by cold, drought, and salt stress, and also in response to exogenous ABA. Subcellular localization analyses revealed that MbDREB1 localizes in the nucleus. A yeast activity assay demonstrated that the MbDREB1 gene encodes a transcription activator, which specifically binds to DRE/CRT elements. Compared with wild-type plants, transgenic Arabidopsis overexpressing MbDREB1 showed increased tolerance to low temperature, drought, and salt stresses. Analysis of the MbDREB1 promoter revealed an ABA-responsive element (ABRE), an inducer of CBF expression 1 (ICE1)-like binding site, two MYB recognition sites, and three stress-inducible GT-1 boxes. GUS activities driven by the MbDREB1 promoter in transgenic Arabidopsis increased in response to ABA, cold temperature, drought, and salt treatments. Interestingly, the expression of both ABA-independent and ABA-dependent stress-induced genes (COR15a and rd29B, respectively) was activated under normal growth conditions in Arabidopsis overexpressing MbDREB1. These results suggest that MbDREB1 functions as a transcription factor and increases plant tolerance to low temperature, drought, and salt stress via both ABA-dependent and ABA-independent pathways.