Most chloroplast and mitochondrial proteins are encoded by nuclear genes, whose functions remain largely unknown because mutant alleles are lacking. A reverse genetics screen for mutations affecting the mitochondrial transcription termination factor (mTERF) family in Arabidopsis thaliana allowed us to identify 75 lines carrying T-DNA insertions. Two of them were homozygous for insertions in the At4g14605 gene, which we dubbed MDA1 (MTERF DEFECTIVE IN Arabidopsis1). The mda1 mutants exhibited altered chloroplast morphology and plant growth, and reduced pigmentation of cotyledons, leaves, stems and sepals. The mda1 mutations enhanced salt and osmotic stress tolerance and altered sugar responses during seedling establishment, possibly as a result of reduced ABA sensitivity. Loss of MDA1 function caused up-regulation of the RpoTp/SCA3 nuclear gene encoding a plastid RNA polymerase and modified the steady-state levels of chloroplast gene transcripts. Double mutant analyses indicated that MDA1 and the previously described mTERF genes SOLDAT10 and RUG2 act in different pathways. Our findings reveal a new role for mTERF proteins in the response to abiotic stress, probably through perturbed ABA retrograde signalling resulting from a disruption in chloroplast homeostasis.