The phytohormone abscisic acid (ABA) plays an important role in modulating plant growth, development, and stress responses. In a genetic screen for mutants with altered drought stress responses, we identified an ABA-overly sensitive mutant, the abo1 mutant, which showed a drought-resistant phenotype. The abo1 mutation enhances ABA-induced stomatal closing and increases ABA sensitivity in inhibiting seedling growth. abo1 mutants are more resistant to oxidative stress than the wild type and show reduced levels of transcripts of several stress- or ABA-responsive genes. Interestingly, the mutation also differentially modulates the development and growth of adjacent guard cells. Map-based cloning identified ABO1 as a new allele of ELO2, which encodes a homolog of Saccharomyces cerevisiae Iki3/Elp1/Tot1 and human IkappaB kinase-associated protein. Iki3/Elp1/Tot1 is the largest subunit of Elongator, a multifunctional complex with roles in transcription elongation, secretion, and tRNA modification. Ecotopic expression of plant ABO1/ELO2 in a tot1/elp1Delta yeast Elongator mutant complements resistance to zymocin, a yeast killer toxin complex, indicating that ABO1/ELO2 substitutes for the toxin-relevant function of yeast Elongator subunit Tot1/Elp1. Our results uncover crucial roles for ABO1/ELO2 in modulating ABA and drought responses in Arabidopsis thaliana.