Background: Aeluropus lagopoides is a salt and drought tolerant grass from Poaceae family, distributed widely in arid regions. There is almost no information about the genetics or genome of this close relative of wheat that stands harsh conditions of deserts. Objectives: The main aim of this research was to isolation and characterization of salt and drought inducible genes from A. lagopoides by Differential Display Amplified fragment length polymorphism (DD-AFLP) method. Material and Methods: In this research A. lagopoides was grown under salt or drought conditions and after modifying the DD-AFLP method several fragments were isolated and after nomination their induction was studied by reverse northern blotting. Results: DD-AFLP led to the improvement of a non-radioactive method for which many parameters were optimized. Having screened approximately 1600 transcript-derived fragments, 1.4 percent of them showed varied expression levels in response to high salt or drought treatments. The relative abundance of twenty one selected differentially expressed fragments was inspected by reverse northern blotting that affirmed the potential of this applied method. Sequence comparisons revealed that some of the isolated genes are involved in osmotic adjustment, regulation of transcription, cation transportation and stress responses. These data clearly show that the modified DD-AFLP method was a successful and reliable approach for the isolation of differentially expressed genes.