Plants respond to survive under water-deficit conditions via a series of physiological, cellular, and molecular processes culminating in stress tolerance. Many drought-inducible genes with various functions have been identified by molecular and genomic analyses in Arabidopsis, rice, and other plants, including a number of transcription factors that regulate stress-inducible gene expression. The products of stress-inducible genes function both in the initial stress response and in establishing plant stress tolerance. In this short review, recent progress resulting from analysis of gene expression during the drought-stress response in plants as well as in elucidating the functions of genes implicated in the stress response and/or stress tolerance are summarized. A description is also provided of how various genes involved in stress tolerance were applied in genetic engineering of dehydration stress tolerance in transgenic Arabidopsis plants.