Salinity, one of the most deleterious stresses, affects growth and overall yield of crop plants. To identify new "candidate genes" having potential role in salinity tolerance, we have carried out 'functional screening' of a cDNA library (made from a salt tolerant rice-Pokkali). Based on this screening, we identified a cDNA clone that was allowing yeast cells to grow in the presence of 1.2 M NaCl. Sequencing and BLAST search identified it as mannose-1-phosphate guanyl transferase (OsMPG1) gene from rice. Analysis of rice genome sequence database indicated the presence of 3 additional genes for MPG. Out of four, three MPG genes viz. OsMPG1, 3 and 4 were able to functionally complement yeast MPG mutant -YDL055C. We have carried out detailed transcript profiling of all members of MPG family by qRT-PCR using two contrasting rice genotypes (IR64 and Pokkali) under different abiotic stresses (salinity, drought, oxidative stress, heat stress, cold or UV light). These MPG genes showed differential expression under various abiotic stresses with two genes (OsMPG1 and 3) showing high induction in response to multiple stresses. Analysis of rice microarray data indicated higher expression levels for OsMPG1 in specific tissues such as roots, leaves, shoot apical meristem and different stages of panicle and seed development, thereby indicating its developmental regulation. Functional validation of OsMPG1 carried out by overexpression in the transgenic tobacco revealed its involvement in enhancing salinity stress tolerance.