The basic helix-loop-helix (bHLH) transcription factors are involved in a variety of physiological processes. However, plant bHLHs functioning in cold tolerance and the underlying mechanisms remain poorly understood. Here, we report the identification and functional characterization of PtrbHLH isolated from trifoliate orange (Poncirus trifoliata). The transcript levels of PtrbHLH were up-regulated under various abiotic stresses, particularly cold. PtrbHLH was localized in the nucleus with transactivation activity. Overexpression of PtrbHLH in tobacco (Nicotiana tabacum) or lemon (Citrus limon) conferred enhanced tolerance to cold under chilling or freezing temperatures, whereas down-regulation of PtrbHLH in trifoliate orange by RNA interference (RNAi) resulted in elevated cold sensitivity. A range of stress-responsive genes was up-regulated or down-regulated in the transgenic lemon. Of special note, several peroxidase (POD) genes were induced after cold treatment. Compared with the wild type, POD activity was increased in the overexpression plants but decreased in the RNAi plants, which was inversely correlated with the hydrogen peroxide (H2O2) levels in the tested lines. Treatment of the transgenic tobacco plants with POD inhibitors elevated the H2O2 levels and greatly compromised their cold tolerance, while exogenous replenishment of POD enhanced cold tolerance of the RNAi line. In addition, transgenic tobacco and lemon plants were more tolerant to oxidative stresses. Yeast one-hybrid assay and transient expression analysis demonstrated that PtrbHLH could bind to the E-box elements in the promoter region of a POD gene. Taken together, these results demonstrate that PtrbHLH plays an important role in cold tolerance, at least in part, by positively regulating POD-mediated reactive oxygen species removal.