Water transport across cellular membranes is regulated by a family of water channel proteins known as aquaporins (AQPs). As most abiotic stresses like suboptimal temperatures, drought or salinity result in cellular dehydration, it is imperative to study the cause–effect relationship between AQPs and the cellular consequences of abiotic stress stimuli. Although plant cells have a high isoform diversity of AQPs, the individual and integrated roles of individual AQPs in optimal and suboptimal physiological conditions remain unclear. Herein, we have identified a plasma membrane intrinsic protein gene (MusaPIP1;2) from banana and characterized it by overexpression in transgenic banana plants. Cellular localization assay performed using MusaPIP1;2::GFP fusion protein indicated that MusaPIP1;2 translocated to plasma membrane in transformed banana cells. Transgenic banana plants overexpressing MusaPIP1;2 constitutively displayed better abiotic stress survival characteristics. The transgenic lines had lower malondialdehyde levels, elevated proline and relative water content and higher photosynthetic efficiency as compared to equivalent controls under different abiotic stress conditions. Greenhouse-maintained hardened transgenic plants showed faster recovery towards normal growth and development after cessation of abiotic stress stimuli, thereby underlining the importance of these plants in actual environmental conditions wherein the stress stimuli is often transient but severe. Further, transgenic plants where the overexpression of MusaPIP1;2 was made conditional by tagging it with a stress-inducible native dehydrin promoter also showed similar stress tolerance characteristics in in vitro and in vivo assays. Plants developed in this study could potentially enable banana cultivation in areas where adverse environmental conditions hitherto preclude commercial banana cultivation.