Transcription factors regulate multiple networks, mediating the responses of organisms to stresses, including drought. Here, we investigated the role of the wheat transcription factor TaSHN1 in crop growth and drought tolerance. TaSHN1, isolated from bread wheat, was characterized for molecular interactions and functionality. The overexpression of TaSHN1 in wheat was followed by the evaluation of T and T transgenic lines for drought tolerance, growth, and yield components. Leaf surface changes were analysed by light microscopy, SEM, TEM, and GC-MS/GC-FID. TaSHN1 behaves as a transcriptional activator in a yeast transactivation assay and binds stress-related DNA cis-elements, determinants of which were revealed using 3D molecular modelling. The overexpression of TaSHN1 in transgenic wheat did not result in a yield penalty under the controlled plant growth conditions of a glasshouse. Transgenic lines had significantly lower stomatal density and leaf water loss and exhibited improved recovery after severe drought, compared with control plants. The comparative analysis of cuticular waxes revealed an increased accumulation of alkanes in leaves of transgenic lines. Our data demonstrate that TaSHN1 may operate as a positive modulator of drought stress tolerance. Positive attributes could be mediated through an enhanced accumulation of alkanes and reduced stomatal density.