Abiotic stresses, especially salinity and drought, are major limiting factors for plant growth and crop productivity. In an attempt to develop salt and drought tolerant tomato, a DNA cassette containing tobacco osmotin gene driven by a cauliflower mosaic virus 35S promoter was transferred to tomato (Solanum lycopersicum) via Agrobacterium-mediated transformation. Putative T0 transgenic plants were screened by PCR analysis. The selected transformants were evaluated for salt and drought stress tolerance by physiological analysis at T1 and T2 generations. Integration of the osmotin gene in transgenic T1 plants was verified by Southern blot hybridization. Transgenic expression of the osmotin gene was verified by RT-PCR and northern blotting in T1 plants. T1 progenies from both transformed and untransformed plants were tested for salt and drought tolerance by subjecting them to different levels of NaCl stress and by withholding water supply, respectively. Results from different physiological tests demonstrated enhanced tolerance to salt and drought stresses in transgenic plants harboring the osmotin gene as compared to the wild-type plants. The transgenic lines showed significantly higher relative water content, chlorophyll content, proline content, and leaf expansion than the wild-type plants under stress conditions. The present investigation clearly shows that overexpression of osmotin gene enhances salt and drought stress tolerance in transgenic tomato plants.