Intensive research over the last decade has gradually unraveled the mechanisms that underlie how plants react to environmental adversity. Genes involved in many of the essential steps of the stress response have been identified and characterized. In particular, the recent discovery of ABA receptors, progress in understanding the transcriptional and post-transcriptional regulation of stress-responsive gene expression, and studies on hormone interactions under stress have facilitated addressing the molecular basis of how plant cells respond to abiotic stress. Here, we summarize recent research progress on these issues, especially focusing on progress related to the essential and classically important signaling pathways and genes. Despite this wealth of achievements, many challenges remain not only for the further elucidation of stress response mechanisms but also for evaluation of the natural genetic variations and associating them with specific gene functions. Finally, the proper application of this knowledge to benefit humans and agriculture is another important issue that lies ahead. Collaborative wisdom and efforts are needed to confront these challenges.