Water stress and hypersensitive response (WHy) domain is typically found as a component of atypical late embryogenesis abundant (LEA) proteins closely associated with resistance to multiple stresses in numerous organisms. Several putative LEA proteins have been identified in Deinococcus bacteria; however their precise function remains unclear. This work reports the characterization of a Deinococcus-specific gene encoding a novel WHy domain-containing hydrophobic LEA5C protein (named DrwH) in D. radiodurans R1. The expression of the drwH gene was induced by oxidative and salinity stresses. Inactivation of this gene resulted in increased sensitivity to oxidative and salinity stresses as well as reduced activities of antioxidant enzymes. The WHy domain of the DrwH protein differs structurally from that of a previously studied bacterial LEA5C protein, dWHy1, identified as a gene product from an Antarctic desert soil metagenome library. Further analysis indicated that in E. coli, the function of DrwH is related to oxidative stress tolerance, whereas dWHy1 is associated with freezing-thawing stress tolerance. Under oxidative stress induced by H2O2, DrwH protected the enzymatic activities of malate dehydrogenase (MDH) and lactate dehydrogenase (LDH). These findings provide new insight into the evolutionary and survival strategies of Deinococcus bacteria under extreme environmental conditions.