A clone for a novel Arabidopsisthaliana calmodulin (CaM)-binding protein of 25 kDa (AtCaMBP25) has been isolated by using a radiolabelled CaM probe to screen a cDNA expression library derived from A. thaliana cell suspension cultures challenged with osmotic stress. The deduced amino acid sequence of AtCaMBP25 contains putative nuclear localization sequences and shares significant degree of similarity with hypothetical plant proteins only. Fusion of the AtCaMBP25 coding sequence to reporter genes targets the hybrid protein to the nucleus. Bacterially expressed AtCaMBP25 binds, in a calcium-dependent manner, to a canonical CaM but not to a less conserved isoform of the calcium sensor. AtCaMBP25 is encoded by a single-copy gene, whose expression is induced in Arabidopsis seedlings exposed to dehydration, low temperature or high salinity. Transgenic plants overexpressing AtCaMBP25 exhibits an increased sensitivity to both ionic (NaCl) and non-ionic (mannitol) osmotic stress during seed germination and seedling growth. By contrast, transgenic lines expressing antisense AtCaMBP25 are significantly more tolerant to mannitol and NaCl stresses than the wild type. Thus, the AtCaMBP25 gene functions as a negative effector of osmotic stress tolerance and likely participates in stress signal transduction pathways.