An experimental system has been developed which allows the identification of intermediates in the abscisic acid (ABA) signal transduction pathway leading to desiccation tolerance in plants. Desiccation tolerance in callus of the resurrection plant Craterostigma plantagineum is mediated via the plant hormone ABA, which induces the expression of gene products related to desiccation tolerance. Based on T-DNA activation tagging, a gene (CDT-1) was isolated which encodes a signalling molecule in the ABA transduction pathway. Constitutive overexpression of CDT-1 leads to desiccation tolerance in the absence of ABA and to the constitutive expression of characteristic transcripts. CDT-1 represents a novel gene with unusual features in its primary sequence. The CDT-1 gene resembles in several features SINE retrotransposons. Mechanisms by which CDT-1 activates the pathway could be via a regulatory RNA or via a short polypeptide.