In plants, low temperature and dehydration activate a set of genes containing C-repeat/dehydration-responsive elements in their promoter. It has been shown previously that the Arabidopsis CBF/DREB1 transcription activators are critical regulators of gene expression in the signal transduction of cold acclimation. Here, we report the isolation of an apparent homolog of the CBF/DREB1 proteins (CBF4) that plays the equivalent role during drought adaptation. In contrast to the three already identified CBF/DREB1 homologs, which are induced under cold stress, CBF4 gene expression is up-regulated by drought stress, but not by low temperature. Overexpression of CBF4 in transgenic Arabidopsis plants results in the activation of C-repeat/dehydration-responsive element containing downstream genes that are involved in cold acclimation and drought adaptation. As a result, the transgenic plants are more tolerant to freezing and drought stress. Because of the physiological similarity between freezing and drought stress, and the sequence and structural similarity of the CBF/DREB1 and the CBF4 proteins, we propose that the plant's response to cold and drought evolved from a common CBF-like transcription factor, first through gene duplication and then through promoter evolution.