D-lactate dehydrogenase (D-LDH) converts D-lactate (the end product of glyoxalase system) to pyruvate and thereby completes the detoxification process of methylglyoxal. D-LDH detoxifies and diverts the stress induced toxic metabolites, MG and D-lactate, towards energy production and thus, protects the cell from their deteriorating effects. In this study, a D-LDH enzyme from rice (OsD-LDH2, encoded by Os07g08950.1) was characterized for its role in abiotic stress tolerance. For this, a combination of in silico, molecular, genetic and biochemical approaches was used. The kinetic analysis revealed OsD-LDH2 to be the most efficient D-LDH enzyme in comparison to D-LDHs from other plant species. Heterologous overexpression of OsD-LDH2 provides tolerance against multiple abiotic stresses in E. coli, yeast and plant system. The analysis of D-LDH mutant and OsD-LDH2 overexpressing transgenic plants uncovered the crucial role of D-LDH in mitigation of abiotic stresses. OsD-LDH2 overexpressing plants maintained lower level of ROS and other toxic metabolites along with better functioning of antioxidant system. This is the first report on correlation of D-LDH with multiple abiotic stress tolerance. Overall, OsD-LDH2 emerged as a promising candidate which can open a new direction for engineering stress tolerant crop varieties by maintaining their growth and yield in unfavorable conditions.