Protein farnesylation is a post-translational modification involving the addition of a 15-carbon farnesyl isoprenoid to the carboxy terminus of select proteins(1-3). Although the roles of this lipid modification are clear in both fungal and animal signalling, many of the mechanistic functions of farnesylation in plant signalling are still unknown. Here, we show that CYP85A2, the cytochrome P450 enzyme that performs the last step in brassinosteroid biosynthesis (conversion of castasterone to brassinolide)(4), must be farnesylated to function in Arabidopsis. Loss of either CYP85A2 or CYP85A2 farnesylation results in reduced brassinolide accumulation and increased plant responsiveness to the hormone abscisic acid (ABA) and overall drought tolerance, explaining previous observations(5). This result not only directly links farnesylation to brassinosteroid biosynthesis but also suggests new strategies to maintain crop yield under challenging climatic conditions.