Identification and evolution of salt tolerant genes are crucial steps in developing salt tolerant crops or microorganisms using biotechnology. Ds-26-16, a salt tolerant gene that was isolated from Dunaliella salina, encodes a transcription factor that can confer salt tolerance to a number of organisms including Escherichia coli (E. coli), Haematococcus pluvialis and tobacco. To further improve its salt tolerance, a random mutagenesis library was constructed using deoxyinosine triphosphate-mediated error-prone PCR technology, and then screened using an E. coli expression system that is based on its broad-spectrum salt tolerance. Seven variants with enhanced salt tolerance were obtained. Variant EP-5 that contained mutation S32P showed the most improvement with the E. coli transformant enduring salt concentrations up to 1.54 M, in comparison with 1.03 M for the wild type gene. Besides, Ds-26-16 and EP-5 also conferred E. coli transformant tolerance to freezing, cold, heat, Cu2+ and alkaline. Homology modeling revealed that mutation S32P in EP-5 caused the conformational change of N- and C-terminal α-helixes. Expression of Ds-26-16 and EP-5 maintained normal cellular morphology, increased the intracellular antioxidant enzymatic activity, reduced malondialdehyde content, and stimulated Nitric Oxide synthesis, thus enhancing salt tolerance to E. coli transformants.