ATHB5 is a member of the homeodomain-leucine zipper (HDZip) transcription factor gene family of Arabidopsis thaliana. In this report we show that increased expression levels of ATHB5 in transgenic Arabidopsis plants cause an enhanced sensitivity to the inhibitory effect of abscisic acid (ABA) on seed germination and seedling growth. Consistent with this finding we demonstrate in northern blot experiments that the ABA-responsive gene RAB18 is hyperinduced by ABA in transgenic overexpressor lines as compared to the wild type. Northern blot and promoter-GUS fusion analyses show that ATHB5 gene transcription is initiated rapidly after the onset of germination and localized primarily to the hypocotyl of germinating seedlings. Moreover, analysis of ATHB5 gene expression during post-germinative growth in different ABA response mutants shows that ATHB5 gene activity is down-regulated in the abil-1, abi3-1 and abi5-1 mutant lines, but not in abi2-1 or abi4-1. The identification of a T-DNA insertion mutant line of ATHB5 is described and no phenotypic alterations could be discerned, suggesting that ATHB5 may act redundantly with other HDZip genes. Taken together, these data suggest that ATHB5 is a positive regulator of ABA-responsiveness, mediating the inhibitory effect of ABA on growth during seedling establishment.