Heterologous expression of a fungal NADP(H)-GDH gene ( MgGDH ) from Magnaporthe grisea can improve dehydration stress tolerance in rice by preventing toxic accumulation of ammonium. Glutamate dehydrogenase (GDH; EC 1.4.1.2 and EC 1.4.1.4) may act as a stress-responsive enzyme in detoxification of high intracellular ammonia and production of glutamate for proline synthesis under stress conditions. In present study, a fungal NADP(H)-GDH gene (MgGDH) from Magnaporthe grisea was over-expressed in rice (Oryza sativa L. cv. 'kitaake'), and the transgenic plants showed the improvement of tolerance to dehydration stress. The kinetic analysis showed that His-TF-MgGDH preferentially utilizes ammonium to produce L-glutamate. Moreover, the affinity of His-TF-MgGDH for ammonium was dramatically higher than that of His-TF-OsGDH for ammonium. Over-expressing MgGDH transgenic rice plants showed lower water-loss rate and higher completely close stomata than the wild-type plants under dehydration stress conditions. In transgenic plants, the NADP(H)-GDH activities were markedly higher than those in wild-type plants and the amination activity was significantly higher than the deamination activity. Compared with wild-type plants, the transgenic plants accumulated much less NH4 (+) but higher amounts of glutamate, proline and soluble sugar under dehydration stress conditions. These results indicate that heterologous expression of MgGDH can prevent toxic accumulation of ammonium and in return improve dehydration stress tolerance in rice.