We have isolated the Arabidopsis thaliana homeobox gene Athb-12, determined its structure and activation domain, demonstrated that its promoter is inducible in response to abscisic acid (ABA) treatment, and characterized the cellular distribution of its transcripts. The single intron of the gene interrupted the leucine-zipper domain region. The 5 ' regulatory region of Athb-12 can drive beta -glucuronidase (GUS) expression in tobacco transgenic plants. Athb-12 gene expression was further examined using in situ hybridization to determine the cellular distribution of Athb-12 transcripts during ABA induction. A complex pattern of Athb-12 expression was observed, often associated with regions of developing vascular tissues. Analysis of chimeras constructed from Athb-12 and the DNA-binding domain of the Saccharomyces cerevisiae transcription factor GAL4 revealed that the activation domain of Athb-12 lies in the C-terminal region (amino acids 180 to 235). Taken together, our data suggest that Athb-12 is a transcriptional activator important in regulating certain developmental processes as well as in the plant's response to water stress involving ABA-mediated gene expression.