Developing efficient stress-tolerant crops through genetic engineering remains one of the major challenges for plant biologists. Approximately 20-40% genes of the known eukaryotic genomes, encode proteins of unknown function which lack currently defined motifs or domains. In a previous study, large-scale yeast functional screening approach in potato was used and 69 genes were reported to have enhanced hyperosmotic stress tolerance of yeast. Twelve out of 69 genes were found to have stress tolerance against multiple stresses. One of those 12 identified genes (StD200) encodes a protein of unknown function. In this study, we evaluated the tolerance against PEGinduced osmotic stress in transgenic Arabidopsis plants expressing putative abiotic stressassociated D200 gene. The D200 plants exhibited higher accumulation of chlorophyll and proline and reduced levels of oxidants compared to the wild-type (WT) control plants when subjected to PEG-induced osmotic stress conditions. Our quantitative Real-Time PCR results also suggested an increased accumulation of mRNA transcripts of genes encoding three major antioxidant enzymes in PEG-treated D200 plants compared to WT. Furthermore, improved photosynthetic parameters, F v / F m and performance index in PEG-treated D200 plants indicated that potato D200 gene is a potential candidate gene for developing stress-tolerant crops in future.