Plasma membrane proteolipid 3 (PMP3) is a class of small hydrophobic proteins found in many organisms including higher plants. Some plant PMP3 genes have been shown to respond to abiotic stresses and to participate in the processes of plant stress tolerance. In this study, we isolated the cassava (Manihot esculenta Crantz) MePMP3-2 gene and functionally characterized its role in tolerance to abiotic stress by expressing it in rice (Oryza sativa L.). MePMP3-2 encodes a 77-amino acid protein belonging to a subgroup of plant PMP3s that have long hydrophylic C-terminal tails of unknown function. In silico analysis and co-localization studies indicated that MePMP3-2 is a plasma membrane protein with two transmembrane domains, similar to other PMP3s. In cassava leaves, MePMP3-2 expression was up-regulated by salt and drought stresses. Heterologous constitutive expression of MePMP3-2 in rice did not alter plant growth and development but increased tolerance to salt and drought stresses. In addition, under stress conditions MePMP3-2 transgenic plants accumulated less malondialdehyde, had increased levels of proline, and exhibited greater up-regulation of the stress-related genes OsProT and OsP5CS, but led to only minor changes in OsDREB2A and OsLEA3 expression. These findings indicate that MePMP3-2 may play an important role in salt and drought stress tolerance in transgenic rice.