HD2 proteins are plant-specific histone deacetylases. Little is known about the function of HD2 proteins in plants. In this paper, we report that an Arabidopsis HD2 protein, AtHD2C, is involved in abscisic acid and abiotic stress responses. Analysis of Arabidopsis plants containing the AtHD2C:β-glucuronidase fusion gene revealed that AtHD2C was constitutive expressed in plants. Furthermore, expression of AtHD2C was repressed by abscisic acid. Over-expression of 35S:AtHD2C-GFP in transgenic Arabidopsis plants conferred an abscisic acid-insensitive phenotype. In addition, 35S:AtHD2C-GFP transgenic plants displayed reduced transpiration and enhanced tolerance to salt and drought stresses when compared with wild-type plants. The expression of several abscisic acid-responsive genes was affected in the 35S:AtHD2C-GFP plants. Our study provides evidence indicating that AtHD2C can modulate abscisic acid and stress responses.