According to the AtGenExpress transcriptome data sets, AtbZIP1 is an Arabidopsis gene induced by several abiotic stresses, such as salt, cold and drought. Here, we isolated AtbZIP1, and used semi-quantitative reverse transcription-PCR to verify that AtbZIP1 expression was indeed significantly induced by salt, osmotic, and cold stresses in Arabidopsis. AtbZIP1 knockout mutants showed a reduced tolerance to salt and osmotic stresses, coinciding with a suppression of the expression of several stress-responsive genes, such as COR15A, RD17 and RD29A. Consistently, the restoration of AtbZIP1 in the knockout lines restored the plants ability to tolerate salt and osmotic stresses. Furthermore, overexpressing AtbZIP1 in the wild type Arabidopsis resulted in an enhanced tolerance to salt and drought stresses. Sequence analysis shows that AtbZIP1 belongs to the S subfamily of basic leucine zipper transcription factors (TFs). The transient expression of green fluorescent protein-AtbZIP1 in tobacco leaf cells showed that AtbZIP1 localizes in nuclei. A transactivation assay further suggested that AtbZIP1 functions as a transcriptional activator in yeast and the two protein motifs (aa 13-38 and 92-118) are indispensable for transactivation activity. These results indicate that the TF AtbZIP1 is a positive regulator of plant tolerance to salt, osmotic, and drought stresses.