Adenosine diphosphate-ribosylation factors (ARFs) are small guanine nucleotide-binding proteins that play an important role in intracellular protein trafficking necessary for undertaking multiple physiological functions in plant growth and developmental processes. However, little is known about the mechanism of ARF functioning at the molecular level, as well as its involvement in abiotic stress tolerance. In this study, we demonstrated the direct involvement of an ARF gene SaARF from a grass halophyte Spartina alterniflora in abiotic stress adaptation for the first time. SaARF, which encodes a protein with predicted molecular mass of 21 kDa, revealed highest identity with ARF of Oryza sativa. The SaARF gene is transcriptionally regulated by salt, drought, cold, and ABA in the leaves and roots of S. alterniflora. Arabidopsis plants overexpressing SaARF showed improved seed germination and survival of seedlings under salinity stress. Similarly, SaARF transgenic Arabidopsis plants were more tolerant to drought stress, compared to wild-type plants, by maintaining chlorophyll synthesis, increasing osmolyte synthesis, and stabilizing membrane integrity. Oxidative damage due to moisture stress in transgenic Arabidopsis was also reduced possibly by activating antioxidant genes, AtSOD1 and AtCAT. Our results suggest that enhanced drought and salinity tolerance conferred by the SaARF gene may be due to its role in mediating multiple abiotic stress tolerance mechanisms.