The resurrection plant Craterostigma plantagineum can tolerate up to 96% loss of its water content and recover from such extreme dehydration within several hours. This property is not shared by callus which has a strict requirement for exogenous abscissic acid (ABA) to survive severe water loss. ABA treatment and dehydration result in the induction of similar drought-responsive genes. Activation tagging led to the isolation of CDT-1 gene which renders callus desiccation tolerant bypassing the ABA requirement. This gene belongs to a retroelement family, members of which are induced by ABA and dehydration in callus, supporting its role in desiccation tolerance. Indeed, CDT genes have been detected in other desiccation tolerant Craterostigma species. CDT-1 RNA of both strands was identified by in situ hybridization and a CDT-1-derived short interfering RNA was detected in desiccation tolerant tissues and was able to induce dehydration genes in transfected protoplasts to the same extent as an ABA treatment. Thus, under environmental stress the induced transposition, over generations, directs the amplification of CDT-copy number in the genome and increases the desiccation tolerance phenomenon.