Abiotic stress results in massive loss of crop productivity throughout the world. Because of our limited knowledge of the plant defense mechanisms, it is very difficult to exploit the plant genetic resources for manipulation of traits that could benefit multiple stress tolerance in plants. To achieve this, we need a deeper understanding of the plant gene regulatory mechanisms involved in stress responses. Understanding the roles of different members of plant gene families involved in different stress responses, would be a step in this direction. Arabidopsis, which served as a model system for the plant research, is also the most suitable system for the functional characterization of plant gene families. Annexin family in Arabidopsis also is one gene family which has not been fully explored. Eight annexin genes have been reported in the genome of Arabidopsis thaliana. Expression studies of different Arabidopsis annexins revealed their differential regulation under various abiotic stress conditions. AnnAt8 (At5g12380), a member of this family has been shown to exhibit ~433 and ~175 fold increase in transcript levels under NaCl and dehydration stress respectively. To characterize Annexin8 (AnnAt8) further, we have generated transgenic Arabidopsis and tobacco plants constitutively expressing AnnAt8, which were evaluated under different abiotic stress conditions. AnnAt8 overexpressing transgenic plants exhibited higher seed germination rates, better plant growth, and higher chlorophyll retention when compared to wild type plants under abiotic stress treatments. Under stress conditions transgenic plants showed comparatively higher levels of proline and lower levels of malondialdehyde compared to the wild-type plants. Real-Time PCR analyses revealed that the expression of several stress-regulated genes was altered in AnnAt8 over-expressing transgenic tobacco plants, and the enhanced tolerance exhibited by the transgenic plants can be correlated with altered expressions of these stress-regulated genes. Our findings suggest a role for AnnAt8 in enhancing abiotic stress tolerance at different stages of plant growth and development.