Abscisic acid (ABA) plays a key role in plant growth and development. The effect ofABA in plants mainly depends on its concentration, which is determined by a balance between biosynthesis and catabolism of ABA. In this study, we characterize a unique UDP-glucosyltransferase (UGT), UGT71C5, which plays an important role in ABA homeostasis by glucosylating ABA to abscisic acid-glucose ester (GE) in Arabidopsis (Arabidopsis thaliana). Biochemical analyses show that UGT71C5 glucosylates ABA in vitro and in vivo. Mutation of UGT71C5 and down-expression of UGT71C5 in Arabidopsis cause delay in seed germination and enhanced drought tolerance. In contrast, overexpression of UGT71C5 accelerates seed germination and reduces drought tolerance. Determination of the content ofABA and ABA-GE in Arabidopsis revealed that mutation in UGT71C5 and down-expression of UGT71C5 resulted in increased level of ABA and reduced level ofABA-GE, whereas overexpression of UGT71C5 resulted in reduced level of ABA and increased level of ABA-GE. Furthermore, altered levels of ABA in plants lead to changes in transcript abundance of ABA-responsive genes, correlating with the concentration of ABA regulated by UGT71C5 in Arabidopsis. Our work shows that UGT71C5 plays a major role in ABA glucosylation for ABA homeostasis.