The trehalose-hydrolyzing enzyme trehalase mediates drought stress tolerance in Arabidopsis thaliana by controlling ABA-induced stomatal closure. We now report the existence of two trehalase isoforms, produced from a single transcript by alternative translation initiation. The longer full-length N-glycosylated isoform (AtTRE1L) localizes in the plasma membrane with the catalytic domain in the apoplast. The shorter isoform (AtTRE1S) lacks the transmembrane domain and localizes in the cytoplasm and nucleus. The two isoforms can physically interact and this interaction afects localization of AtTRE1S. Consistent with their role in plant drought stress tolerance, both isoforms are activated by AtCPK10, a stress-induced calcium-dependent guard cell protein kinase. Transgenic plants expressing either isoform indicate that both can mediate ABA-induced stomatal closure in response to drought stress but that the short (cytoplasmic/nuclear) isoform, enriched in those conditions, is signifcantly more efective