Dehydrins are late embryogenesis abundant proteins that help regulate abiotic stress responses in plants. Overexpression of the Saussurea involucrata dehydrin gene SiDHN has previously been shown to improve water-use efficiency and enhance cold and drought tolerance of transgenic tobacco. To understand the mechanism by which SiDHN exerts its protective function, we transformed the SiDHN gene into tomato plants (Solanum lycopersicum L.) and assessed their response to abiotic stress. We observed that in response to stresses, the SiDHN transgenic tomato plants had increased contents of chlorophyll a and b, carotenoid and relative water content compared with wild-type plants. They also had higher maximal photochemical efficiency of photosystem II and accumulated more proline and soluble sugar. Compared to those wild-type plants, malondialdehyde content and relative electron leakage in transgenic plants were not significantly increased, and H2O2 and O2- contents in transgenic tomato plants were significantly decreased. We further observed that the production of stress-related antioxidant enzymes, including superoxide dismutase, ascorbate peroxidase, peroxidase, and catalase, as well as pyrroline-5-carboxylate synthetase and lipid transfer protein 1, were up-regulated in the transgenic plants under cold and drought stress. Based on these observations, we conclude that overexpression of SiDHN gene can promote cold and drought tolerance of transgenic tomato plants by inhibiting cell membrane damage, protecting chloroplasts, and enhancing the reactive oxygen species scavenging capacity. The finding can be beneficial for the application of SiDHN gene in improving crop tolerance to abiotic stress and oxidative damage.