Calcium serves as a critical messenger in many adaptation and developmental processes. Cellular calcium signals are detected and transmitted by sensor molecules such as calcium-binding proteins. In plants, the calcineurin B-like protein (CBL) family represents a unique group of calcium sensors and plays a key role in decoding calcium transients by specifically interacting with and regulating a family of CBL-interacting protein kinases (CIPKs). In this study, we report the role of Arabidopsis CBL5 gene in high salt or drought tolerance. CBL5 gene is expressed significantly in green tissues, but not in roots. CBL5 was not induced by abiotic stress conditions such as high salt, drought or low temperature. To determine whether the CBL5 gene plays a role in stress response pathways, we ectopically expressed the CBL5 protein in transgenic Arabidopsis plants (35S-CBL5) and examined plant responses to abiotic stresses. CBL5-overexpressing plants displayed enhanced tolerance to high salt or drought stress. CBL5 overexpression also rendered plants more resistant to high salt or hyperosmotic stress during early development (i.e., seed germination) but did not alter their response to abiscisic acid (ABA). Furthermore, overexpression of CBL5 alters the gene expression of stress gene markers, such as RD29A, RD29B and Kin1 etc. These results suggest that CBL5 may function as a positive regulator of salt or drought responses in plants.