In plants, small heat shock proteins (sHSPs) are unusually abundant and diverse proteins involved in various abiotic stresses, but their functions in seed vigor remain to be fully explored. In this study, we report the isolation and functional characterization of a sHSP gene, NnHSP17.5, from sacred lotus (Nelumbo nucifera Gaertn.) in seed germination vigor and seedling thermotolerance. Sequence alignment and phylogenetic analysis indicate that NnHSP17.5 is a cytosolic class II sHSP, which was further supported by the cytosolic localization of the NnHSP17.5-YFP fusion protein. NnHSP17.5 was specifically expressed in seeds under normal conditions, and was strongly up-regulated in germinating seeds upon heat and oxidative stresses. Transgenic Arabidopsis seeds ectopically expressing NnHSP17.5 displayed enhanced seed germination vigor and exhibited increased superoxide dismutase activity after accelerated aging treatment. In addition, improved basal thermotolerance was also observed in the transgenic seedlings. Taken together, this work highlights the importance of a plant cytosolic class II sHSP both in seed germination vigor and seedling thermotolerance.