This study investigated the integration of Arabidopsis vacuolar H+-pyro-phosphatase (H+-PPase) (AVP1) transgene in transgenic sugarcane plants for drought tolerance. The gene integration was confirmed by polymerase chain reaction (PCR) and Southern blotting. Transgene expression was estimated by Western blotting. When sugarcane plants were grown on soil under 50% reduced water supply, the transgenic sugarcane overexpressing AVP1 produced higher shoot biomass based on cane height, number of millable canes, and Brix (%) compared with wild-type. The overexpression of AVP1 in transgenic sugarcane plants increased tolerance to drought stress, as demonstrated by increased relative water content (RWC) and leaf water (Psi(w)), osmotic (Psi(s)), and turgor potential (Psi(p)). Physiological parameters such as photosynthetic rate (P-n), stomatal conductance (C), and transpiration rate (E) were less affected by water-deficit stress in transgenic AVP1 plants compared with wild-type plants. In conclusion, our results indicated that AVP1 conferred tolerance to drought or water-deficit stress, highlighting potential use of this gene for crop improvement through biotechnological applications.