Contrasting with the wealth of information available on the multiple roles of jasmonates in plant development and defense, knowledge about the functions and the biosynthesis of hydroxylated oxylipins remains scarce. By expressing the caleosin RESPONSIVE TO DESSICATION20 (RD20) in Saccharomyces cerevisiae, we show that the recombinant protein possesses an unusual peroxygenase activity with restricted specificity toward hydroperoxides of unsaturated fatty acid. Accordingly, Arabidopsis (Arabidopsis thaliana) plants overexpressing RD20 accumulate the product 13-hydroxy-9,11,15-octadecatrienoic acid, a linolenate-derived hydroxide. These plants exhibit elevated levels of reactive oxygen species (ROS) associated with early gibberellin-dependent flowering and abscisic acid hypersensitivity at seed germination. These phenotypes are dependent on the presence of active RD20, since they are abolished in the rd20 null mutant and in lines overexpressing RD20, in which peroxygenase was inactivated by a point mutation of a catalytic histidine residue. RD20 also confers tolerance against stress induced by Paraquat, Rose Bengal, heavy metal, and the synthetic auxins 1-naphthaleneacetic acid and 2,4-dichlorophenoxyacetic acid. Under oxidative stress, 13-hydroxy-9,11,15-octadecatrienoic acid still accumulates in RD20-overexpressing lines, but this lipid oxidation is associated with reduced ROS levels, minor cell death, and delayed floral transition. A model is discussed where the interplay between fatty acid hydroxides generated by RD20 and ROS is counteracted by ethylene during development in unstressed environments.