Water deficit is one of the most important environmental stress factors limiting the growth and productivity of agronomically important plants. Plant responses to water deficit are complex, involving the co-ordination and integration of multiple biochemical pathways leading to the expression of a number of genes encoding proteins which contribute to drought adaptation. A central response to water deficit is increased synthesis of abscisic acid (ABA), which in turn induces a range of physiological and biochemical effects. Genes whose expression is increased during water deficit include those encoding neoxanthin cleavage enzyme, the key enzyme of ABA biosynthesis, enzymes and proteins involved in osmotic adaptation and tolerance of cellular dehydration, cellular protective enzymes, and a range of signalling proteins such as protein kinases and transcription factors that are probably involved in intracellular signalling in response to water stress. Regulatory DNA sequences that confer responsiveness to water stress and ABA have been identified and the transcription factors that interact with such cis-elements are being characterised. It is clear that reversible protein phosphorylation is central to the perception and response to water deficit stress and the highly conserved mitogen-activated protein kinase (MAPK)-signalling pathway is the focus of intensive research. The involvement of inositol lipid- and calcium-based signalling has also been demonstrated. Significant progress has been made by the use of single-gene mutants and this will continue. It is also apparent that further advances will be made through the use of single cell micro-injection and transient expression assays, as well as by the use of transgenic and antisense technology.