Modulation of growth in response to environmental cues is a fundamental aspect of plant adaptation to abiotic stresses. TIP41 (TAP42 INTERACTING PROTEIN OF 41 kDa) is the Arabidopsis thaliana orthologue of proteins isolated in mammals and yeast that participate in the Target-of-Rapamycin (TOR) pathway, which modifies cell growth in response to nutrient status and environmental conditions. Here, we characterized the function of TIP41 in Arabidopsis. Expression analyses showed that TIP41 is constitutively expressed in vascular tissues, and is induced following long-term exposure to NaCl, polyethylene glycol and abscisic acid (ABA), suggesting a role of TIP41 in adaptation to abiotic stress. Visualization of a fusion protein with yellow fluorescent protein indicated that TIP41 is localized in the cytoplasm and the nucleus. Abolished expression of TIP41 results in smaller plants with a lower number of rosette leaves and lateral roots, and an increased sensitivity to treatments with chemical TOR inhibitors, indicating that TOR signalling is affected in these mutants. In addition, tip41 mutants are hypersensitive to ABA at germination and seedling stage, whereas over-expressing plants show higher tolerance. Several TOR- and ABA-responsive genes are differentially expressed in tip41, including iron homeostasis, senescence and ethylene-associated genes. In yeast and mammals, TIP41 provides a link between the TOR pathway and the protein phosphatase 2A (PP2A), which in plants participates in several ABA-mediated mechanisms. Here, we showed an interaction of TIP41 with the catalytic subunit of PP2A. Taken together, these results offer important insights into the function of Arabidopsis TIP41 in the modulation of plant growth and ABA responses.