Abscisic acid (ABA) is a plant hormone that regulates plant growth as well as stress responses. In this study, we identified and characterized a new Arabidopsis (Arabidopsis thaliana) protein, Nuclear Protein X1 (NPX1), which was up-regulated by stress and treatment with exogenous ABA. Stomatal closure, seed germination, and primary root growth are well-known ABA responses that were less sensitive to ABA in NPX1-overexpressing plants. NPX1-overexpressing plants were more drought sensitive, and the changes in response to drought were due to the altered guard cell sensitivity to ABA in transgenic plants and not to a lack of ABA production. The nuclear localization of NPX1 correlated with changes in the expression of genes involved in ABA biosynthesis and ABA signal transduction. To understand the function of NPX1, we searched for interacting proteins and found that an ABA-inducible NAC transcription factor, TIP, interacted with NPX1. Based on the whole plant phenotypes, we hypothesized that NPX1 acts as a transcriptional repressor, and this was demonstrated in yeast, where we showed that TIP was repressed by NPX1. Our results indicate that the previously unknown protein NPX1 acts as a negative regulator in plant response to changes in environmental conditions through the control of ABA-regulated gene expression. The characterization of this factor enhances our understanding of guard cell function and the mechanisms that plants use to modulate water loss from leaves under drought conditions.