BACKGROUND: HD-Zip genes encode several large and highly conserved protein families of transcription factors that play important roles in plant development and responses to environmental stress. To date, information about the involvement of HD-Zip in grape to drought response is limited. OBJECTIVE: The production of grapes is limited by a range of biotic and abiotic stresses, which cause significant losses in yield every year as well as a reduction in fruit quality. Identification and analysis of stress related genes in grapes are very important for cultivating more robust varieties with environmental stress resistance METHODS: We isolated a homeodomain-leucine zipper gene (HD-Zip), VvHDZ4, from grape, Vitis vinifera L. “Yatomi Rose”, and characterized VvHDZ4 based on analyses of its expression patterns, subcellular localization, transcription activity, and overexpression. RESULTS: We found that VvHDZ4 was highly expressed in roots and leaves, localized to nucleus, and activated the expression of reporter genes in yeast. The overexpression (OE) of VvHDZ4 led to enhanced drought stress tolerance in Solanum lycopersicum L. “Ailsa Craig” (tomato). The drought-tolerant phenotypes of the OE lines exhibited decreases in electrolyte leakage and rate of water loss, higher photosynthetic production and net photosynthesis rate, and showed up-regulation of superoxide dismutase (SOD), catalase (CAT), peroxidase (POD), and ascorbate peroxidase (APX), all of which are key antioxidant enzymes known to be activated during drought stress. Moreover, we observed the up-regulation of four additional drought stress indicator genes, SIDREB2A, SIAREB, SIRD29 and SIERD10, in the OE lines. VvHDZ4 improved drought tolerance in tomato, and the modes of action possibly consist of reducing membrane damage, increasing photosynthetic productivity, and modulating the expression of stress defense genes. CONCLUSIONS: This work increases our understanding of the important roles HD-Zip transcription factors in the responses of plants to the environment, especially abiotic stress.